2 tools

Business

Margin and markup get confused constantly, and the difference decides whether a price is profitable. These tools keep the definitions straight and show the working.

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Margin & Markup Calculator

Margin is profit against the price; markup is the same profit against the cost. Enter what an item costs and what it sells for to get both, then set a target to see the two different prices it implies.

This answers two questions that sound like one. The first is what margin and markup a price you already charge actually produce: enter the cost and the price and both come back, along with the profit in dollars, so the two percentages sit side by side on the same item rather than being quoted separately by different people. The second is the pricing question in reverse. Give it a target percentage and it prices that target twice — once as a margin, profit as a share of the selling price, and once as a markup, profit as a share of the cost — and shows the gap between the two prices in dollars. On a $40 item at a 50% target those prices are $80 and $60, which is not a subtle difference and is the reason this page reports both instead of choosing. Nothing here models overheads, tax, shipping or returns: it is unit arithmetic on one item, and the figures it produces are gross rather than what the business keeps.

Open the margin & markup calculator

Also in business

Each one answers a different question, not a rephrasing of the same one.