Margin & Markup Calculator
Determine selling price, gross margin, and markup percentage to ensure your product pricing meets profit goals. Includes profit breakdown and flexible input modes.
Enter cost and selling price to calculate markup and margin percentages
Key Differences
Complete Guide: Margin & Markup Calculator
Everything you need to know about using this tool effectively
This calculator computes both profit margin and markup percentage from your cost and selling price. Margin is calculated as (price minus cost) divided by price, while markup is (price minus cost) divided by cost. Use it to set prices, analyze profitability, and understand the relationship between these two common metrics.
A business pricing tool that calculates margin and markup percentages along with dollar profit on each sale. It helps you convert between margin and markup since they are often confused. The calculator also works in reverse, letting you input a desired margin to find the required selling price for a given cost.
Retail Product Pricing
Set retail prices that hit your target profit margin while accounting for wholesale cost, overhead, and competitive positioning.
Wholesale Markup Setting
Determine the correct markup percentage to apply to your cost base when selling to retailers or distributors.
Profitability Analysis
Compare margin across your product lines to identify which items contribute most to your bottom line.
Quote Preparation
Quickly calculate selling prices for customer quotes that ensure your desired margin on custom orders.
Enter the Cost
Type the unit cost or total cost of the product or service you are pricing.
Enter the Selling Price
Input the price you plan to charge or are currently charging customers.
View Margin and Markup
The calculator displays both margin percentage and markup percentage along with dollar profit per unit.
Calculate Reverse Pricing
Alternatively, enter a cost and target margin to find the selling price you need to set.
Do not use margin and markup interchangeably. A 50 percent margin equals a 100 percent markup, which is a common source of pricing errors.
Set your prices based on margin when your goal is to protect a percentage of revenue as profit.
Use markup when you want a simple multiplier on your cost base, which is common in wholesale and manufacturing.
Review margins regularly because supplier cost changes can silently erode your profitability.
Compare your margins to industry benchmarks to see whether your pricing is competitive and sustainable.
What is the difference between margin and markup?
Margin measures profit as a percentage of the selling price, while markup measures profit as a percentage of the cost. For the same dollar profit, margin will always be a smaller percentage number than markup.
How do I convert margin to markup?
Divide the margin by (1 minus the margin). For example, a 40 percent margin equals a markup of 40 divided by 0.6, which is 66.7 percent. This calculator does the conversion automatically.
Which should I use for pricing, margin or markup?
Most businesses use margin for financial reporting and profitability analysis. Markup is more common in purchasing and wholesale contexts where prices are set as a multiplier over cost. Use whichever aligns with how your industry operates.
Can this calculator handle services?
Yes, enter your labor and overhead cost as the cost value and the price you charge clients as the selling price. The margin and markup calculations work the same for services as for physical products.
What is a healthy profit margin?
Healthy margins vary widely by industry. Grocery stores operate on thin margins around 2 to 5 percent, while software companies often achieve 70 to 90 percent gross margins. Research your specific industry to find appropriate benchmarks.