About the Margin vs Markup Converter
Margin and markup both describe profit, but they use different bases. Markup is profit as a percentage of cost; margin is profit as a percentage of the selling price. A 50% markup is only a 33.3% margin, and mixing them up is one of the most common pricing mistakes in retail, wholesale and service businesses.
Choose whether you are starting from a margin or a markup, enter the percentage, and the converter returns the equivalent figure on the other basis. Add a unit cost to see the selling price and profit per unit that result, plus a reference table of common margin levels and the markup needed to reach each.
Use it when a supplier quotes "keystone" markup, when your accountant reports gross margin, or when you set price lists from cost. The math assumes margin and markup are both measured on the same unit cost and price, before overheads and taxes.
With the default inputs, the equivalent percentage is 66.67%. Change any value above to recalculate instantly.
How to use the margin vs markup converter
- 1Choose whether the number you have is a margin or a markup.
- 2Enter the percentage (for example 40 for a 40% margin).
- 3Optionally enter the unit cost to see the selling price and profit per unit.
- 4Read the equivalent percentage, then use the reference table to compare other margin targets.
Formula and method
Margin divides profit by the selling price, while markup divides the same profit by cost. Because price is always larger than cost (when you make a profit), the margin percentage is always smaller than the markup percentage for the same product.
To convert, express percentages as decimals: a 0.40 margin becomes 0.40 ÷ 0.60 = 0.667, a 66.7% markup. Going the other way, a 0.50 markup becomes 0.50 ÷ 1.50 = 0.333, a 33.3% margin. The selling price that achieves a margin is cost ÷ (1 − margin), which is the same as cost × (1 + markup).
- Margin
- (Price − Cost) ÷ Price
- Markup
- (Price − Cost) ÷ Cost
- Cost
- Unit cost of the product or service
Worked examples
Target a 40% margin on a $60 item
A 40% margin means profit is 40% of price. The markup is 0.40 ÷ 0.60 = 66.67% of cost, so a $60 item must sell for $100, leaving $40 profit.
What margin does a 50% markup give?
Marking a $20 cost up by 50% gives a $30 price and $10 profit. That $10 is only one third of the $30 price, so the margin is 33.33%.
25% margin on a $45 cost
A 25% margin needs a 0.25 ÷ 0.75 = 33.33% markup. Dividing the $45 cost by 0.75 gives a $60 price with $15 profit.
Frequently asked questions
What is the difference between margin and markup?+
Markup is profit divided by cost; margin is profit divided by selling price. The same $10 profit on a $20 cost and $30 price is a 50% markup but a 33.3% margin.
What markup do I need for a 50% margin?+
A 50% margin requires a 100% markup — you double the cost. This is often called keystone pricing in retail.
Can margin be more than 100%?+
No. Margin is profit as a share of price, and profit can never exceed the price unless costs are negative. Markup, however, can be any size — a 300% markup is a 75% margin.
Should I price using margin or markup?+
Either works if you are consistent. Many businesses set targets as gross margin (because financial statements report margin) and then convert to a markup to calculate prices from cost.
Why is my profit lower than my markup suggested?+
If you calculate price with markup but budget with margin percentages, you overstate profit. Always convert to one basis, and remember that neither figure includes overheads such as rent or salaries.