Question 1

What's the difference between markup and margin?

Accepted Answer

Markup is calculated based on cost: ((Price - Cost) / Cost) × 100. Margin is calculated based on selling price: ((Price - Cost) / Price) × 100. For the same profit, markup percentage is always higher than margin percentage. For example, a 50% markup equals a 33.33% margin.

Question 2

How do I calculate selling price from cost and desired margin?

Accepted Answer

Use our calculator's 'Price from Cost and Margin' mode. Enter your cost and desired margin percentage, and the calculator will show the selling price needed. Formula: Price = Cost / (1 - Margin/100).

Question 3

How do I convert markup to margin?

Accepted Answer

Use our calculator to see both markup and margin for any cost/price combination. Margin = (Markup / (1 + Markup/100)) × 100. For example, a 50% markup converts to a 33.33% margin. The calculator handles this conversion automatically.

Question 4

What is a good profit margin for a product?

Accepted Answer

Good profit margins vary by industry. Retail typically has 2-5% margins, restaurants 3-5%, software 20-30%, and luxury goods 50%+. Use industry benchmarks and your business goals to determine appropriate margins. Higher margins provide more financial cushion.

Question 5

How do I calculate maximum cost to maintain a target margin?

Accepted Answer

Use our calculator's 'Cost from Price and Margin' mode. Enter your selling price and target margin percentage, and the calculator shows the maximum cost you can pay. Formula: Cost = Price × (1 - Margin/100). This helps with supplier negotiations and cost management.

Markup/Margin Calculator - Profit Margin, Markup Percentage & Pricing Strategy

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