Calculate sell price from cost and markup, plus the resulting margin. Includes the markup-vs-margin reference table and conversion formulas every retailer needs.
These two terms describe the same dollar profit but measure it against different bases:
markup = profit ÷ cost × 100margin = profit ÷ sell × 100A product that costs $40 and sells for $60 has $20 of profit. The markup is 50% (20 ÷ 40), but the margin is 33.3% (20 ÷ 60). Margin is always lower than markup for the same profit.
markup = margin ÷ (1 − margin/100) × 100
margin = markup ÷ (1 + markup/100) × 100| Markup | Margin |
|---|---|
| 10% | 9.1% |
| 20% | 16.7% |
| 33.3% | 25% |
| 50% | 33.3% |
| 100% | 50% |
| 200% | 66.7% |
Retailers and manufacturers often quote markups (easier to apply to cost). Investors and accountants prefer margins (more comparable across businesses). A 50% gross margin sounds healthier than a 50% markup, even though the margin requires a 100% markup. Confusing the two is one of the most common mistakes in retail pricing conversations.
Markup is profit as a percentage of cost; margin is profit as a percentage of sell price. A 50% markup yields a 33.3% margin on the same $20 profit. Always confirm which term someone is using.
Sell price = cost ÷ (1 − margin/100). To achieve a 40% margin on a $30 cost: sell = 30 ÷ 0.60 = $50.
It depends heavily on the industry. Software businesses often have 70%+ gross margins. Grocery stores operate on 20–25%. Restaurants on 60–70% food margins. Benchmark against your specific industry.
Markup = (sell − cost) ÷ cost × 100. If cost is $40 and sell is $60: (60 − 40) ÷ 40 × 100 = 50% markup.
No. Margin is profit as a fraction of sell price; since profit can be at most equal to sell price (when cost is zero), margin caps at 100%. Markup, on the other hand, can be any positive number — a $1 cost selling for $10 has a 900% markup.