Markup vs Margin
Calculator
Convert between markup and margin instantly. Understand why they're different, when each one matters, and how confusing them leads to underpricing.
the same profit
from different
starting points
| Markup % | Gross Margin % | On $100 cost — sell for | Profit per $100 cost |
|---|---|---|---|
| 10% | 9.1% | $110.00 | $10.00 |
| 20% | 16.7% | $120.00 | $20.00 |
| 25% | 20.0% | $125.00 | $25.00 |
| 33% | 24.8% | $133.00 | $33.00 |
| 50% | 33.3% | $150.00 | $50.00 |
| 75% | 42.9% | $175.00 | $75.00 |
| 100% | 50.0% | $200.00 | $100.00 |
| 150% | 60.0% | $250.00 | $150.00 |
| 200% | 66.7% | $300.00 | $200.00 |
| 400% | 80.0% | $500.00 | $400.00 |
What is markup?
Markup is the amount added above cost, expressed as a percentage of cost. If something costs you $100 and you sell it for $150, your markup is 50%.
Markup % = (Price − Cost) ÷ Cost × 100
Retailers and manufacturers often think in markup because they start with a known cost and work forward. The danger: a "100% markup" sounds like full profit, but it's actually a 50% margin — you still spent half the revenue on cost.
What is gross margin?
Gross margin is the same profit expressed as a percentage of revenue. If you sell for $150 and cost was $100, your gross margin is 33.3%.
Gross Margin % = (Price − Cost) ÷ Price × 100
Investors, accountants, and most financial reporting use margin, not markup — because it tells you what percentage of each revenue dollar you actually keep before overhead. A 33.3% margin means you keep 33 cents of every dollar.
Why does confusing them cost money?
If you want a 30% profit margin but set prices using 30% markup, you'll earn only a 23.1% margin — falling short every time. At scale, this gap compounds into significant underpricing. Always clarify which one a target refers to before setting prices.
To get 30% margin → use 42.9% markup
Which should you use?
Use margin when: reporting to investors, comparing to industry benchmarks, calculating profitability from a P&L, or working toward a net profit target. Use markup when: building a price list from a wholesale cost, quoting jobs, or setting distributor pricing tiers. Most industries have standard markup conventions — knowing both lets you translate between them.