Markup vs Margin Calculator
Markup is the % added to cost. Margin is the % of selling price that is profit. A Rs 100 item sold for Rs 150: markup = 50%, but margin = 33.3%. Retailers often confuse these: pricing for 40% margin requires a 66.7% markup on cost, not 40% markup. Always clarify which one you are targeting in pricing discussions.
Profit
₹400
Profit Margin
33.33%
Profit / Selling Price
Markup
50%
Profit / Cost Price
Margin % = (Profit / Selling Price) x 100. Markup % = (Profit / Cost Price) x 100. A 50% markup is only a 33.3% margin.
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Common questions about Markup vs Margin Calculator
How do I convert markup to margin and vice versa?
Margin to markup: Markup % = Margin % / (1 - Margin %). Example: 30% margin = 30/70 = 42.86% markup. Markup to margin: Margin % = Markup % / (1 + Markup %). Example: 50% markup = 50/150 = 33.33% margin. This conversion matters in pricing: if you want a 40% margin, you must mark up your cost by 66.7%, not 40%.
What markup should a retailer use to hit a 30% gross margin target?
Target 30% gross margin requires: Markup = 30% / (1 - 30%) = 42.86%. So if your cost is Rs 70, sell at Rs 70 x 1.4286 = Rs 100. Common retail categories: grocery aims for 20-30% margin (29-43% markup). Clothing 50-60% margin (100-150% markup). Electronics 10-25% margin (11-33% markup). Higher-margin categories subsidize promotions and markdowns.
How do discounts affect profit margin?
Discounts destroy margin faster than you think. If margin is 30% and you give a 10% discount: new margin = (30 - 10) / (100 - 10) = 20/90 = 22.2%, not 20%. Volume needs to increase 50% to compensate for a 10% discount at 30% margin. Discounting erodes profitability unless offset by significant volume increases - often not achieved.