worldofcalcsMarkup and Margin Calculator
Selling Price
₹1,500.00
Profit
₹500.00
Markup
50%
Margin
33.33%
Markup vs margin
Markup and margin both describe profit as a percentage, but measured against different things. Markup is profit as a share of your cost; margin is profit as a share of the selling price. Mixing them up is a common pricing mistake: a 50% markup is only a 33% margin.
Markup and margin formulas
Price = cost × (1 + markup %) · Price = cost ÷ (1 − margin %)
Markup % = profit ÷ cost × 100. Margin % = profit ÷ selling price × 100. To convert, margin = markup ÷ (100 + markup) × 100, and markup = margin ÷ (100 − margin) × 100. Choose 'by margin' to find the price that gives a target margin.
Pricing tips
- Retailers and distributors usually talk in margins; manufacturers and many small shops think in markups. Ask which one is meant.
- A margin can never reach 100%, but a markup can be any size.
- Include every cost in the cost price, such as shipping, packaging and platform fees, or the margin will look better than it is.
- Work on prices without GST. GST is added on top for the customer and paid to the government.
- Discounts come out of the margin. On a 33% margin, a 20% discount leaves only about 17%.
Worked example
- A product costs ₹1,000
- With a 50% markup: price = ₹1,000 × 1.5 = ₹1,500, profit ₹500
- Margin on that price: ₹500 ÷ ₹1,500 = 33.33%
- For a 50% margin instead: price = ₹1,000 ÷ 0.5 = ₹2,000, which is a 100% markup
Margin and the markup it needs
The markup on cost needed for each target margin, and the price for an item that costs ₹100.
| Target margin | Markup needed | Price for ₹100 cost |
|---|---|---|
| 10% | 11.11% | ₹111.11 |
| 20% | 25% | ₹125 |
| 25% | 33.33% | ₹133.33 |
| 30% | 42.86% | ₹142.86 |
| 40% | 66.67% | ₹166.67 |
| 50% | 100% | ₹200 |
| 60% | 150% | ₹250 |
As the margin rises, the markup needed grows faster.