Markup vs. margin calculator
In short: markup is profit as a share of cost; margin is profit as a share of the sell price. A 30% markup is a 23.1% margin. Enter a cost below to price a line either way.
- Markup
- 30%
- Margin
- 23.1%
- Profit each
- $1.25
- Line total (400)
- $2,173.60
- Line profit
- $501.60
A 30% markup is a 23.1% margin. To earn a true 30% margin, price at $5.97.
Markup to margin, at a glance
| Markup on cost | Margin on sell price | $100 cost sells for |
|---|---|---|
| 10% | 9.1% | $110.00 |
| 15% | 13.0% | $115.00 |
| 20% | 16.7% | $120.00 |
| 25% | 20.0% | $125.00 |
| 30% | 23.1% | $130.00 |
| 35% | 25.9% | $135.00 |
| 40% | 28.6% | $140.00 |
| 50% | 33.3% | $150.00 |
| 60% | 37.5% | $160.00 |
| 75% | 42.9% | $175.00 |
| 100% | 50.0% | $200.00 |
Questions
What is the difference between markup and margin?
Markup is profit as a percentage of your cost. Margin is profit as a percentage of the selling price. An item that costs $100 and sells for $130 has a 30% markup and a 23.1% margin. Both describe the same $30 profit.
How do I convert markup to margin?
Margin = markup ÷ (100 + markup), times 100. A 30% markup is 30 ÷ 130 = 23.1% margin. A 50% markup is a 33.3% margin, and a 100% markup is a 50% margin.
How do I price an item for a target margin?
Divide the cost by (1 − target margin). For a 25% margin on a $4.18 cost: $4.18 ÷ 0.75 = $5.57. Adding 25% markup instead would give $5.23, which is only a 20% margin.
Why do distributors confuse markup and margin?
Because the numbers look alike. Quoting a "25% margin" by adding 25% to cost actually delivers a 20% margin. On a large quote that gap is real money, so it pays to decide which one your price list and your quotes use.
Let Otto do the math on every quote
Otto, MySourceBot’s AI purchasing employee, applies your markup to supplier costs in code, shows the margin on every quote, and records where each price came from. Watch him work.
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