Margin & Markup Calculator
Calculate profit margin, markup percentage, and selling price from cost. Three modes: find margin, find price from margin, or find price from markup.
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Frequently asked questions
What is the difference between margin and markup?
Both measure profit but with different denominators. Margin (gross profit margin) divides profit by the selling price: Margin = (Price - Cost) / Price x 100. Markup divides profit by cost: Markup = (Price - Cost) / Cost x 100. For the same transaction, markup is always a larger percentage than margin. Example: cost $50, price $75 -> profit $25 -> margin = 33.3%, markup = 50%.
What is a good profit margin?
It varies by industry. Software/SaaS: 70-90% gross margin. Grocery retail: 1-3%. Restaurants: 3-9%. Apparel: 40-60%. Electronics retail: 5-10%. Professional services: 30-50%. Manufacturing: 20-40%. The meaningful comparison is against your industry peers. Net profit margin (after operating expenses and taxes) is what ultimately matters for business health.
How do I price products to hit a target margin?
Use the 'Selling Price from Cost & Margin' mode. Formula: Price = Cost / (1 - Margin%). Example: cost $40, target 60% margin -> Price = $40 / (1 - 0.60) = $40 / 0.40 = $100. Common mistake: adding the margin percentage to cost ($40 + 60% = $64) gives markup, not margin, and results in a much lower actual margin than intended.