How to use this margin calculator
- Cost, enter what the item costs you (materials, wholesale price, or unit cost).
- Sale price, enter the price you sell it for.
- Read your profit, profit margin % and markup %, they update instantly as you type.
Nothing is submitted or stored: the numbers never leave your device, so you can price your products and check your figures privately.
Margin vs markup, what is the difference?
Margin and markup both start from the same profit, but they measure it against different things, and mixing them up is one of the most common pricing mistakes. The profit itself is simple: profit = price - cost. Where they split is the denominator. Profit margin is that profit as a share of the sale price, so margin% = profit ÷ price × 100. Markup is the same profit as a share of the cost, so markup% = profit ÷ cost × 100. Because the sale price is always larger than the cost on a profitable item, the margin percentage is always smaller than the markup percentage.
Margin tells you how much of every sale you keep, which is useful for understanding profitability and comparing products. Markup tells you how much you added on top of cost, which is handy when you are setting a price from a known cost. Both are worth knowing, and this calculator shows you all three numbers at once so you never have to guess which one a supplier or report is using.
Worked example
Say an item costs you $40 and you sell it for $100. Your profit is$100 - $40 = $60. The profit margin is $60 ÷ $100 × 100 = 60%, meaning 60 cents of every dollar you take in is profit. The markup is $60 ÷ $40 × 100 = 150%, meaning you priced the item at 150% above what it cost you. Same item, same profit, two very different percentages, which is exactly why it pays to be clear about which one you mean.
Tip: Margin can never reach 100% (you would need a cost of zero), but markup has no upper limit. If someone quotes you a "50% margin" and a "50% markup" they are talking about very different prices.
Frequently asked questions
What is the difference between margin and markup?
Both start from the same profit (price minus cost), but they divide it differently. Margin is profit as a percentage of the sale price, while markup is profit as a percentage of the cost. A 50% markup is only a 33.3% margin, so they are never the same number unless profit is zero.
How do I calculate profit margin?
Subtract cost from sale price to get profit, then divide profit by the sale price and multiply by 100. For example, a $40 item sold for $100 has $60 profit, which is a 60% profit margin.
How do I calculate markup percentage?
Take your profit (sale price minus cost) and divide it by the cost, then multiply by 100. A $40 item sold for $100 has $60 profit on $40 of cost, which is a 150% markup.
Why is my margin lower than my markup?
Margin divides profit by the larger number (the sale price), while markup divides the same profit by the smaller number (the cost). Dividing by a bigger number always gives a smaller percentage, so margin is lower than markup whenever you are making a profit.
Is my data uploaded?
No, everything is calculated on your device and nothing is sent anywhere.