Markup & Margin Calculator
Determine the selling price, profit margin, and markup for your products
About Markup & Margin
Understanding the difference between markup and margin is crucial for any business. This tool helps you calculate both metrics instantly, ensuring you price your products correctly to achieve your desired profit.
Definitions
- Markup: The percentage added to the cost price to get the selling price. (Profit / Cost) * 100.
- Margin (Gross Margin): The percentage of the selling price that is profit. (Profit / Revenue) * 100.
- Profit: Revenue - Cost.
For example, if you buy a product for $100 and sell it for $150, your profit is $50. Your markup is 50%, but your margin is 33.3%.
Frequently Asked Questions
Because margin is calculated based on the total revenue (which is higher than cost), while markup is calculated based on cost. Since the denominator is larger for margin, the percentage is smaller.
Markup is typically used to set prices (e.g., "mark up by 50%"). Margin is used to measure profitability and financial health.
No, margin cannot exceed 100% because profit cannot be greater than revenue. Markup, however, can be any percentage (e.g., 200%, 500%).
It varies by industry. Retail might aim for 50% markup (keystone pricing), resulting in a 33% margin. Software companies often have margins of 80%+.
No, this calculator focuses on gross profit before tax. Use our VAT Calculator to handle taxes.