The markup formula
Markup = (selling price − cost) ÷ cost × 100
Selling price = cost × (1 + markup ÷ 100)
Margin = (selling price − cost) ÷ selling price × 100
Example: a candle costs you $20 to make. Mark it up 50% and you sell it for $30, keeping $10. That’s a 50% markup but only a 33.3% margin, because margin divides the same $10 by the $30 price.
Markup to margin: margin = markup ÷ (100 + markup) × 100. A 25% markup is a 20% margin, 50% is 33.3%, 100% is 50% and 200% is 66.7%. Going the other way, markup = margin ÷ (100 − margin) × 100.
Markup vs margin: same profit, two different numbers
Markup and margin both start from the same profit: your price minus your cost. Markup divides that profit by the cost. Margin divides it by the price. The price is always bigger than the cost, so the margin is always the smaller number. A 50% markup is a 33% margin.
Why mixing them up costs you
Say you want a 40% margin, so you add 40% to your cost. Your margin comes out at 28.6%, and you’re short on every sale. It’s an easy mistake to make. Decide which number you’re aiming for, then let the math do the rest.
How to use it
This markup calculator starts from your cost. Enter what one unit costs you, all in: materials, packaging, shipping to you and the labor to make it. Then type a markup, a margin or a selling price, and the other two fill in. Use it to set a price, check the one you have, or turn a margin target into the markup you need.
FAQs
How do you calculate markup?
Subtract the cost from the selling price, divide by the cost and multiply by 100. Something that costs you $60 and sells for $90 has a markup of ($90 − $60) ÷ $60 × 100 = 50%. To go the other way, multiply the cost by 1 plus the markup: $60 × 1.5 = $90.
What is a 40% markup on $100?
A 40% markup on a $100 cost adds $40, so you sell it for $140. Your margin on that sale is $40 ÷ $140, or 28.6%.
Is 30% markup the same as 30% margin?
No. A 30% markup on a $100 cost gives you a $130 price and a 23.1% margin. To get a 30% margin you need a 42.9% markup: the same $100 cost, sold for $142.86.
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