Markup and margin both describe profit, but measure it differently. Markup is profit as a percentage of cost; margin is profit as a percentage of selling price. So a $100 item sold at $150 has a 50% markup but a 33.3% margin. This calculator prices from a markup %, a target margin %, or a known price, and always shows the profit and both percentages so the two never get confused.
Reviewed: June 20, 2026 · Author: Naveen P N, Founder — AI Calculator · Verified against: standard markup/margin pricing formulas, recomputed in code.
Markup, margin and price
Profit is the dollar gap between price and cost. Express it over cost and you get markup; over price and you get margin. Because price is bigger than cost, margin is always the smaller percentage. To price a product, multiply cost by one-plus-markup, or divide cost by one-minus-margin to hit a target margin. The two convert directly: margin = markup ÷ (1 + markup).
Worked example — cost $100
Scenario: an item that costs $100.
A 50% markup on a $100 cost gives a $150 price, $50 profit, and a 33.3% margin. Aiming instead for a 40% margin needs a higher price of $166.67 (a 66.7% markup). And if you already sell at $150, the calculator back-solves the same 50% markup and 33.3% margin. Notice how the markup figure always exceeds the margin for the identical sale.
Frequently Asked Questions
Markup = profit ÷ cost; margin = profit ÷ price. $100 → $150: markup 50%, margin 33.3%. Markup is always bigger.
price = cost × (1 + markup). $100 × 1.5 = $150. For a target margin: price = cost ÷ (1 − margin).
margin = markup ÷ (1 + markup). 50% markup → 0.5/1.5 = 33.3% margin. And markup = margin ÷ (1 − margin).
It varies — retail often 50–100%, groceries less, software more. It should cover overheads and target profit.
No — profit is a dollar amount; margin is that profit as a % of price. $50 on $150 = 33.3% margin.