# What is my markup and margin?

Computes the selling price, profit, markup and profit margin from any two of the cost, the revenue, the profit and a markup or margin percent.

- Page: https://www.acalculator.org/math/markup-calculator
- JSON spec: https://www.acalculator.org/math/markup-calculator.json
- Version: 77e56f96c14e

## Default answer

Example with the default inputs (Cost $100.00, Percent 25%, The percent is Markup (of cost)): A cost of $100.00 sells for $125.00: a profit of $25.00, a 25% markup and a 20% margin.

## Inputs

| Key | Label | Description |
| --- | --- | --- |
| cost | Cost | What the item costs you to buy or make. |
| rate | Percent | The markup (profit ÷ cost × 100) or the margin (profit ÷ revenue × 100), as chosen above. Negative for a loss. |
| revenue | Revenue | The selling price. |
| profit | Profit | The selling price minus the cost. Negative for a loss. |
| basis | The percent is | Whether the percent is a markup (profit as a percent of the cost) or a margin (of the price). |

## Outputs

| Key | Label | Description |
| --- | --- | --- |
| cost | Cost | What the item costs you to buy or make. |
| rate | Percent | The markup (profit ÷ cost × 100) or the margin (profit ÷ revenue × 100), as chosen above. Negative for a loss. |
| revenue | Revenue | The selling price. |
| profit | Profit | The selling price minus the cost. Negative for a loss. |
| markup | Markup | The profit as a percent of the cost: P ÷ C × 100. |
| margin | Margin | The profit as a percent of the revenue (gross margin): P ÷ R × 100. |

## Method

P = R − C; markup M = P ÷ C × 100, so R = C × (1 + M ÷ 100); margin G = P ÷ R × 100, so C = R × (1 − G ÷ 100). C is the cost, R the revenue (selling price), P the profit.

## Assumptions

- Markup is the profit as a percent of the cost; margin is the profit as a percent of the selling price.
- The cost and the selling price are more than 0. A loss gives a negative profit, markup and margin.
- Limits hold for typed and worked-out values alike: cost and revenue above 0 and at most 1 trillion, profit within ± 1 trillion, percent −99% or more. An answer outside a limit is no answer.
- A margin of 100% or more has no answer, because the cost would be 0 or less.
- Arithmetic is exact on the typed decimals; money shows to the cent, halves away from 0 (420.175 shows as $420.18).

## Worked examples

1. basis = markup, cost = $100.00, rate = 25% gives revenue = $125.00, profit = $25.00, markup = 25%, margin = 20%. Source: OpenStax, Prealgebra 2e, §6.3 Solve Sales Tax, Commission, and Discount Applications (discount and mark-up). https://openstax.org/books/prealgebra-2e/pages/6-3-solve-sales-tax-commission-and-discount-applications.
2. basis = margin, cost = $50.00, rate = 20% gives revenue = $62.50, profit = $12.50, markup = 25%. Source: OpenStax, Prealgebra 2e, §6.3 Solve Sales Tax, Commission, and Discount Applications (discount and mark-up). https://openstax.org/books/prealgebra-2e/pages/6-3-solve-sales-tax-commission-and-discount-applications.
3. basis = markup, revenue = $200.00, profit = $50.00 gives cost = $150.00, rate = 33.333333%, margin = 25%. Source: OpenStax, Prealgebra 2e, §6.3 Solve Sales Tax, Commission, and Discount Applications (discount and mark-up). https://openstax.org/books/prealgebra-2e/pages/6-3-solve-sales-tax-commission-and-discount-applications.
4. basis = markup, cost = $40.00, revenue = $60.00 gives profit = $20.00, rate = 50%, margin = 33.333333%. Source: OpenStax, Prealgebra 2e, §6.3 Solve Sales Tax, Commission, and Discount Applications (discount and mark-up). https://openstax.org/books/prealgebra-2e/pages/6-3-solve-sales-tax-commission-and-discount-applications.
5. basis = markup, revenue = $80.00, rate = 60% gives cost = $50.00, profit = $30.00. Source: OpenStax, Prealgebra 2e, §6.3 Solve Sales Tax, Commission, and Discount Applications (discount and mark-up). https://openstax.org/books/prealgebra-2e/pages/6-3-solve-sales-tax-commission-and-discount-applications.
6. basis = margin, profit = $30.00, rate = 25% gives revenue = $120.00, cost = $90.00, markup = 33.333333%. Source: OpenStax, Prealgebra 2e, §6.3 Solve Sales Tax, Commission, and Discount Applications (discount and mark-up). https://openstax.org/books/prealgebra-2e/pages/6-3-solve-sales-tax-commission-and-discount-applications.

## FAQ

### What is markup?

Markup is the difference between the cost of a product and its selling price, expressed as a percentage of the cost. It represents the profit added to the cost to determine the selling price. For example, if a product costs $50 and sells for $75, the markup is 50%.

### How do I calculate markup percentage?

Markup percentage is calculated using the formula: Markup % = ((Selling Price - Cost) ÷ Cost) × 100. For example, if a product costs $40 and sells for $60, the markup is ((60 - 40) ÷ 40) × 100 = 50%. This means you're adding 50% to the cost to get the selling price.

### What's the difference between markup and margin?

Markup is calculated as a percentage of the cost, while margin is calculated as a percentage of the selling price. Markup shows how much you add to the cost, while margin shows what percentage of the selling price is profit. For example, a 50% markup equals a 33.33% margin.

### How do I calculate selling price from cost and markup?

To calculate selling price from cost and markup percentage, use the formula: Selling Price = Cost × (1 + Markup % ÷ 100). For example, if cost is $30 and markup is 40%, the selling price is $30 × (1 + 40 ÷ 100) = $30 × 1.4 = $42.

### How do I calculate cost from selling price and markup?

To calculate cost from selling price and markup percentage, use the formula: Cost = Selling Price ÷ (1 + Markup % ÷ 100). For example, if selling price is $80 and markup is 60%, the cost is $80 ÷ (1 + 60 ÷ 100) = $80 ÷ 1.6 = $50.

### What is a good markup percentage?

Good markup percentages vary a lot by industry and product, so there is no single right number. Compare with your industry standards and competitors, and check that the margin covers your overheads and target profit.

### How does markup affect profit?

Higher markup generally means higher profit per unit, but it might reduce sales volume if prices become uncompetitive. Lower markup might increase sales volume but reduce profit per unit. The optimal markup balances profit per unit with sales volume to maximize total profit.

### What is the relationship between markup and discount?

Markup and discount are related but opposite concepts. Markup adds to the cost to get selling price, while discount reduces the selling price. For example, a 20% markup followed by a 20% discount doesn't return to the original cost - you'd end up with 96% of the original cost.

### How do I calculate markup for services?

For services, markup is calculated on your cost of providing the service (labor, materials, overhead). For example, if it costs you $50 in labor and materials to provide a service, and you charge $75, your markup is ((75 - 50) ÷ 50) × 100 = 50%.

### What factors should I consider when setting markup?

Consider your costs (materials, labor, overhead), competition, target profit margins, market demand, product lifecycle, and customer price sensitivity. Also factor in taxes, shipping, and other expenses that affect your total cost structure.

### Why can't I get a price from a markup and a margin alone?

Markup and margin are both ratios. A 25% markup always gives a 20% margin, whatever the price. To get a price, give one percent and the cost, the selling price, or the profit. The calculator shows the other percent.

## Sources

- OpenStax, Prealgebra 2e, §6.3 Solve Sales Tax, Commission, and Discount Applications (discount and mark-up). https://openstax.org/books/prealgebra-2e/pages/6-3-solve-sales-tax-commission-and-discount-applications