Free tools / Margin and markup

Margin and markup calculator.

Margin is profit as a share of the price. Markup is profit as a share of the cost. Confusing them is one of the commonest ways to underprice, so this shows both, every time.

No sign-up. Nothing you type leaves your browser.

Include freight and duty if you pay them. A cost that leaves them out gives a margin you will not see in the bank.
%
%
%
%
%
The lowest margin you are willing to sell at. The bar marks it.

Margin and markup are not the same number

Buy at 60, sell at 100. You made 40. As a share of the price that is a 40% margin. As a share of the cost it is a 66.7% markup. Same sale, two numbers, and the markup is always the bigger one.

margin % = (price − cost) ÷ price × 100
markup % = (price − cost) ÷ cost × 100

The trap: someone decides they want “40%” and adds 40% to the cost. 60 plus 40% is 84, and the margin on 84 is 28.6%, not 40. To earn a 40% margin you divide: 60 ÷ (1 − 0.40) = 100.

What a discount really costs

A discount comes off the price, but your cost does not move, so the whole discount comes out of profit. At a 30% margin, a 10% discount takes a third of your profit on that sale. To bank the same money you have to sell half as many units again.

extra units needed % = discount ÷ (margin − discount) × 100

If the discount is as big as the margin, there is no volume that makes it back: every sale is at or below cost.

Questions

Which one should I price with?

Either, as long as everyone in the business uses the same one. Finance usually talks in margin, because it lines up with the profit and loss account. Buyers often talk in markup, because they start from cost.

Should I use the price with tax or without?

Without. Sales tax you collect is not yours, so it is not part of your margin.

What is a good margin?

It depends on the trade, the volume and what it costs you to serve the customer. The useful question is what margin you need to cover your overheads and leave a profit, and that is the floor to set here.

Is my data sent anywhere?

No. The sums are done in your browser.

More free tools

PRICING

Wholesale and retail price calculator

Build the price ladder up from your cost, or work it back from the shelf price, with volume tiers.

Open the tool →PRICING

Landed cost calculator

Freight, insurance, duty and brokerage spread across a shipment, to a true cost per unit.

Open the tool →PRICING

Break-even calculator

Units to cover your costs, units for the profit you want, and your margin of safety.

Open the tool →DOCUMENTS

Quote generator

Build a quote with up to three options, see your margin on every line, and print a clean PDF.

Open the tool →