What is the difference between margin and markup?

Margin (or profit margin) is profit expressed as a percentage of the selling price. Markup is profit expressed as a percentage of the cost price. For example, if a product costs $40 and sells for $100: margin = ($100−$40)/$100 = 60%; markup = ($100−$40)/$40 = 150%. The same profit produces different percentages depending on the base used.

How do I calculate profit margin?

Profit Margin = (Selling Price − Cost Price) ÷ Selling Price × 100. For example, a product costing $40 and selling for $100 has a profit margin of ($100−$40)/$100 × 100 = 60%.

How do I calculate markup percentage?

Markup % = (Selling Price − Cost Price) ÷ Cost Price × 100. A product costing $40 and selling for $100 has a markup of ($100−$40)/$40 × 100 = 150%.

What selling price gives me a 60% margin?

To find the selling price for a target margin: Selling Price = Cost ÷ (1 − Margin/100). For a $40 cost and 60% desired margin: $40 ÷ (1 − 0.60) = $40 ÷ 0.40 = $100. Use the 'Find Sell Price' mode in the calculator above.

Free Margin & Markup Calculator — Profit Margin, Markup % & Selling Price

Q: What is a good profit margin for retail?

Gross margins vary widely by industry. Grocery retail typically runs 20–25%. Fashion retail 50–60%. Electronics 10–15%. Software 70–80%+. A gross margin above 50% is generally considered strong for physical goods, while service businesses often target 60–80%.

Four modes in one: find your profit margin, calculate markup percentage, work out the selling price for a target margin, or find maximum allowable cost from a selling price. Built for retailers, wholesalers and anyone pricing products.

Margin & Markup Calculator

Cost Price

Selling Price

How to Use the Margin & Markup Calculator

Select the mode that matches what you know and what you need to find. Find Margin — enter cost price and selling price to get profit margin % and markup %. Find Markup — same inputs, result emphasis is on markup %. Find Sell Price — enter cost price and your desired margin to get the exact selling price you need to charge. Find Cost — enter your selling price and target margin to find the maximum cost you can afford to pay. Enter your values and click Calculate.

Margin vs Markup — Key Difference

Margin and markup both express profit as a percentage — but they use a different denominator, which makes them look very different for the same transaction. Margin uses selling price as the base. Markup uses cost price as the base. This means for the same product, markup will always be a larger percentage than margin.

Scenario	Cost	Sell	Profit	Margin	Markup
Low margin product	$80	$100	$20	20%	25%
Mid margin product	$40	$100	$60	60%	150%
High margin product	$10	$100	$90	90%	900%

A common mistake in business is quoting margin and markup interchangeably. A buyer who asks "what is your margin?" and a supplier who answers with their markup figure will end up with a significant misunderstanding — especially at high percentages.

Margin & Markup Formulas

Margin (%) = (Sell − Cost) ÷ Sell × 100

Markup (%) = (Sell − Cost) ÷ Cost × 100

Sell Price = Cost ÷ (1 − Margin / 100)

Max Cost = Sell × (1 − Margin / 100)

The sell price formula is the most useful for retailers: it answers "given my cost and my target margin, what do I charge?" Note that you cannot simply add the margin percentage to cost — a 60% margin on a $40 cost is not $40 + 60% = $64. The correct answer is $40 ÷ 0.40 = $100.

Real-World Examples

Fashion Retail

Cost Price$25.00

Selling Price$79.99

Gross Profit$54.99

Margin68.7%

Markup: 220%

Target Margin Pricing

Cost Price$60.00

Target Margin40%

Required Sell Price$100.00

Gross Profit$40.00

Markup: 66.7%

Max Cost (Buyer)

Selling Price$50.00

Required Margin50%

Max Cost Allowed$25.00

Gross Profit$25.00

Markup: 100%

Frequently Asked Questions

Margin is profit as a percentage of the selling price. Markup is profit as a percentage of the cost price. A product costing $40 and selling for $100 has a 60% margin but a 150% markup. Same profit — very different percentages.

Profit Margin = (Selling Price − Cost Price) ÷ Selling Price × 100. For a $40 cost and $100 selling price: ($100−$40)/$100 × 100 = 60% margin.

Markup % = (Selling Price − Cost Price) ÷ Cost Price × 100. A $40 cost and $100 sell price: ($100−$40)/$40 × 100 = 150% markup.

Selling Price = Cost ÷ (1 − Margin/100). For a $40 cost and 60% target: $40 ÷ 0.40 = $100. Use the Find Sell Price tab above.

It varies widely. Grocery retail runs 20–25%. Fashion 50–60%. Electronics 10–15%. Software 70–80%+. A gross margin above 50% gives strong room to cover operating costs and still generate net profit.