Markup vs Margin Converter
Instantly convert between Markup Percentage and Gross Margin Percentage. Avoid the most common pricing mistake in retail.
Quick Reference
Common conversions
100% Markup
= 50% Margin (Doubling Cost)
50% Markup
= 33% Margin
25% Markup
= 20% Margin
Execution Steps
Select your input mode: Are you setting a Markup or a Margin?
Enter your product Cost.
Enter your percentage.
The tool automatically calculates the Final Price and the inverse metric.
Pro Strategy
- Always clarify: 'Is that 20% on cost or on price?' in meetings.
- Margin can never exceed 100% (unless cost is 0 or negative). Markup can be infinite.
- Keystone pricing (doubling cost) is 100% Markup and 50% Margin.
Core Concepts
Markup
Percentage added to the COST. (Price - Cost) / Cost. Used by buyers and manufacturers.
Margin
Percentage of the PRICE that is profit. (Price - Cost) / Price. Used by finance and executives.
The Trap
A 50% Markup is NOT a 50% Margin. It is a 33% Margin. Confusing these two can destroy profitability.
What is Markup vs Margin Converter?
This simple calculator uses the fundamental accounting identities relating Cost, Price, Profit, Margin, and Markup. It visualizes the proportion of profit within the final price to make the difference intuitive.
Best For
- • Setting initial prices from a cost sheet.
- • Translating supplier quotes.
- • Training new merchants or sales staff.
Limitations
- • Calculates Gross metrics only.
- • Does not account for tax.
Alternative Methods
Revenue & Margin Calculator
More detailed P&L view.
Industry Applications
See how this methodology generates real revenue uplift in different sectors.
Retail Buyer Error
Buyer was tasked with achieving 40% margin. She applied 40% markup.
Actual margin was 28.5%. The category missed profit targets by $100k.