Pricing Markup vs Margin Calculator
Understand markup vs margin for your product pricing. Calculate profit per unit, total profit, and see how markup and margin relate to each other.
🏷️Pricing Inputs
Enter your cost and pricing information
Compare Markup and Margin for Your Price
Enter cost, price, or target margin/markup to see profit and percentage differences. Understand how markup and margin relate to each other.
AI Business & Startup Finance Explainer (beta)
Educational only • Not financial advice
Ask things like: "What does my break-even point mean for my business?", "How can I lower my break-even?", "Is my contribution margin healthy?", or "What happens if I increase my price by 10%?"
This AI is experimental and may be inaccurate. Always validate important business, financial, and strategic decisions with qualified professionals before acting on them.
Understanding Markup vs Margin
What is Markup?
Markup is the percentage added to the cost of a product to determine the selling price. It represents profit as a percentage of cost. A 50% markup means you add 50% of the cost on top of your cost to get the price.
What is Margin?
Margin (also called profit margin or gross margin) is the percentage of the selling price that is profit. It represents how much of each dollar of revenue you keep after covering cost. A 50% margin means half of your selling price is profit.
The Key Difference
The crucial difference is the denominator: markup uses cost, while margin uses selling price. Since price is always higher than cost (for profitable items), the same dollar profit produces a higher markup percentage than margin percentage.
Same $5 profit, but different percentages depending on whether you compare to cost or price.
Common Markup-to-Margin Conversions
| Markup | Margin | Example ($10 cost) |
|---|---|---|
| 25% | 20% | Price = $12.50 |
| 50% | 33.3% | Price = $15.00 |
| 100% | 50% | Price = $20.00 |
| 150% | 60% | Price = $25.00 |
| 200% | 66.7% | Price = $30.00 |
When Each is Commonly Used
Markup is often used in:
- - Retail pricing decisions
- - Wholesale to retail calculations
- - Cost-plus pricing strategies
- - Manufacturing and production
Margin is often used in:
- - Financial statements and reporting
- - Profitability analysis
- - Comparing business performance
- - Investor communications
Educational Use Only
This calculator provides educational information about markup and margin calculations. It is not personalized pricing, financial, tax, or accounting advice. Actual pricing decisions should consider market conditions, competition, demand elasticity, and other business factors. Consult with qualified professionals for specific business guidance.
Frequently Asked Questions
This information is for educational purposes only and should not be considered professional pricing, financial, or accounting advice.
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Master Your Pricing Strategy
Understanding the difference between markup and margin is essential for setting profitable prices and analyzing your business performance.
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