Markup Calculator

Your supplier sells you the product at $40. You want to make 60% margin. What do you charge? Easy to get wrong, because markup and margin aren't the same thing. Type cost and the percentage you want — toggle whether that's markup or margin — and get the selling price.

Markup is the percentage above cost ($40 cost + 60% markup = $64). Margin is the percentage of selling price that's profit ($40 cost at 60% margin = $100). Same words, very different math. Mixing them up is one of the most common pricing mistakes in small business.

The calculator shows both views simultaneously, so once you see them next to each other, you'll never confuse them again.

The math: markup percentage = (selling price − cost) / cost × 100. Margin percentage = (selling price − cost) / selling price × 100. Same numerator, different denominator. So a $40 cost selling for $60 has $20 of profit. Markup is 20/40 = 50%. Margin is 20/60 = 33.3%. The same item, the same profit, two completely different percentages depending on which definition you're using. Mixing them up is how a 'we're at 50% margin' conversation can refer to either a comfortable or marginal pricing position.

A worked example showing the gap: you buy products at $30 and want to make 40% margin. Wrong approach: $30 + 40% = $42, which gives you 12/42 = 28.6% margin, not 40%. Right approach: solve for the price that produces 40% margin. Since margin = profit/price, we want profit = 0.4 × price, which means cost = 0.6 × price, so price = $30 / 0.6 = $50. Charging $50 gives $20 profit on $50, which is 40% margin. The same answer expressed as markup: $20 / $30 = 66.7%.

Where this trips small businesses up: a supplier quotes 'standard 30% margin' on resale. Does that mean charge cost × 1.30 (markup interpretation) or charge cost / 0.70 (margin interpretation)? On a $100 cost, those are $130 versus $142.86 — a 10% difference in your selling price. Always confirm which definition the supplier means before agreeing to the resale terms. Most people in retail use 'margin' loosely; most accountants use it strictly.

The strategic implication: optimizing for margin and optimizing for markup lead to different decisions. A high-margin product at $200 with $50 cost (75% margin, 300% markup) generates $150 profit per unit. A lower-margin product at $30 with $20 cost (33% margin, 50% markup) generates $10 profit per unit. The high-margin product needs to sell 15× less to match the low-margin product's profit volume. Whether that's achievable depends on the market — which is why margin/markup analysis is the start of pricing strategy, not the end.