Margin & markup calculator
Convert between margin and markup, and price from cost or cost from price.
profit ÷ price
profit ÷ cost
Margin ↔ markup conversion
| Margin | Equivalent markup | Price on a $40.00 cost |
|---|---|---|
| 20% | 25% | $50.00 |
| 25% | 33.3% | $53.33 |
| 30% | 42.9% | $57.14 |
| 40% | 66.7% | $66.67 |
| 50% | 100% | $80.00 |
| 60% | 150% | $100.00 |
| 70% | 233.3% | $133.33 |
How it works
Both describe the same profit; they just divide it by different things.
margin = profit ÷ price
markup = profit ÷ cost
price = cost ÷ (1 − margin)
price = cost × (1 + markup) The expensive mistake
A retailer wanting a 40% margin who applies a 40% markup instead sells at £56 on a £40 cost — a 28.6% margin, not 40%. Across a whole catalogue that shortfall is often the entire difference between profit and loss. To hit a 40% margin you need a 66.7% markup.
Margin is capped, markup is not
Margin can never reach 100%, because profit can never exceed the price. Markup has no ceiling — a product costing £1 and selling for £10 carries a 900% markup and a 90% margin. This asymmetry is why margin is the standard for reporting and markup the standard for pricing rules.
Gross, not net
These figures use unit cost only. Rent, salaries, marketing and overhead come out of the gross margin, so a healthy gross margin does not by itself mean a profitable business.