Markup Calculator
Calculate selling price, markup %, cost, or convert between markup and margin.
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Markup vs Margin — The Most Confused Concepts in Business Math
Same profit, different denominators.
| Markup | Margin | |
|---|---|---|
| Definition | % above cost | % of selling price |
| Denominator | Cost price | Selling price |
| Formula | (Price−Cost)÷Cost×100 | (Price−Cost)÷Price×100 |
| Example (Cost $40, Price $60) | 50% markup | 33.3% margin |
| Always | Higher number | Lower number |
⚠️ Markup is always higher than margin for the same transaction. If someone quotes you a "50% margin," verify whether they mean markup.
Typical Markup Percentages by Industry
| Industry | Typical Markup | Equiv. Margin | Notes |
|---|---|---|---|
| Grocery | 15–25% | 13–20% | High volume, thin margins |
| Apparel | 100–150% | 50–60% | Covers seasonal markdowns |
| Restaurants | 200–350% | 67–78% | Labour & overhead intensive |
| Electronics | 10–30% | 9–23% | Low margins, high competition |
| Software / SaaS | 500–2000% | 83–95% | Near-zero marginal cost |
| Furniture | 200–400% | 67–80% | Showroom & delivery costs |
Frequently Asked Questions
Is markup the same as profit margin?
No. Markup divides profit by cost; margin divides profit by revenue. A 50% markup always equals a 33.3% margin. Markup is always the larger number.
What markup do I need to achieve a 40% margin?
Use: Markup = Margin ÷ (1 − Margin/100). For 40% margin: 40 ÷ 0.60 = 66.7% markup.
How do I set a markup that covers overhead?
Add your overhead percentage to your desired profit margin, then convert to markup. If overhead is 20% and you want 15% net profit, you need a 35% gross margin — a 53.8% markup.
What is a healthy markup for a small business?
Retail typically needs 50–100% markup. Service businesses often mark up labour at 100–300%. See the industry table for benchmarks.