Margin & markup calculator

Margin vs. markup: what's the difference

Margin and markup work with the same profit, but from a different base. That's why the numbers come out different and so many people confuse them:

• Markup = how much you added to the cost price. Formula: (selling − cost) ÷ cost × 100.
• Margin = how much of the selling price you keep. Formula: (selling − cost) ÷ selling × 100.

So for the same product, markup is always higher than margin. The classic example: you buy for 100 CZK and sell for 150 CZK. The markup is 50%, but the margin is only 33.3%. The profit is 50 CZK either way, only the base differs. To convert between them: margin = markup ÷ (100 + markup) × 100.

FAQ

What is the difference between margin and markup?

Markup is calculated from the cost price, margin from the selling price. For the same product, markup is always higher than margin. The profit is the same, only the base the percentage is calculated from differs.

How do you calculate margin?

Margin % = (selling − cost) ÷ selling × 100. It shows what percentage of the selling price is your profit.

How do you calculate markup?

Markup % = (selling − cost) ÷ cost × 100. It tells you by what percentage you increased the cost price.

How do you convert markup to margin?

Margin = markup ÷ (100 + markup) × 100. The other way round: markup = margin ÷ (100 − margin) × 100.

Margin here means gross margin (the difference between selling and cost price). It does not include other costs like shipping, packaging or fees. For the overall profitability of your e-shop, try the break-even calculator.