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Calculate selling price, markup and margin
This calculator helps you instantly work out selling price, markup, and gross margin for any product or service. Markup is the percentage added to your cost, while margin is the profit as a percentage of the selling price. Enter your cost and either a markup or margin target to get all the key figures at once.
Take the profit amount and divide it by the selling price instead of by the cost. In percentage terms: divide the markup rate by one plus the markup rate, since markup is measured against cost and margin against revenue.
A 20% markup adds one fifth of the cost on top of the cost, so the selling price is the cost plus that fifth. The resulting margin is smaller than 20%, because the same profit is now compared with the higher selling price.
No. Markup is profit as a percentage of cost, margin is profit as a percentage of the selling price, so a 30% markup always produces a margin below 30%.
Divide the margin by the share of the price that is cost, meaning the margin rate divided by one minus the margin rate. Because cost is the smaller base, the required markup is clearly higher than the 40% margin figure.
No, it is a normal level in many industries and high only in low-margin sectors such as grocery retail or wholesale distribution. What matters is whether the margin covers your overhead, financing and risk.
If $100 is the selling price, 30% of it is gross profit and the remainder is your cost. If $100 is the cost, the price has to be set higher so that the profit equals 30% of that price.
A 30% markup is modest and works in high-volume or low-overhead businesses, but it leaves a noticeably smaller margin than 30%. Whether it is enough depends on your fixed costs, returns and discounts.
Yes, a 50% gross margin is strong and typical for software, services and branded consumer goods. It is far less common in manufacturing, construction or resale, where cost of goods eats up more of the price.
Divide the markup by cost plus markup, which gives a margin around a quarter of the selling price. The margin is always lower than the markup because the selling price is the larger base.
Setting the right selling price is one of the most important decisions any business owner makes. Whether you're pricing handmade goods, retail products, or wholesale orders, understanding the difference between markup and margin helps you stay profitable. A markup calculator lets you start from your cost and apply a percentage to reach a selling price, while a margin calculator works backward from the revenue side to tell you what percentage of each sale is pure profit.
For example, if you buy a product for $40 and apply a 50% markup, your selling price becomes $60. But your profit margin on that $60 sale is only 33.3% — not 50%. This distinction trips up a lot of small business owners. Both numbers describe the same $20 profit, just from different angles. Getting this right means you'll never accidentally underprice a product thinking your margin is higher than it actually is.
Markup is calculated on cost. Margin is calculated on revenue. If your cost is $25 and you sell for $50, your markup is 100% but your profit margin is 50%. These two figures are related but never equal (unless your profit is zero). Retailers often think in markup because they start with supplier costs, while accountants and investors prefer margin because it reflects real earnings as a portion of sales.
The formula for markup is: Selling Price = Cost × (1 + Markup%). The formula for margin is: Selling Price = Cost ÷ (1 − Margin%). So a 40% margin on a $30 item gives a selling price of $50, while a 40% markup on the same $30 item gives only $42. That $8 difference adds up fast when you're moving hundreds of units. Using a profit margin calculator removes the guesswork and shows you exactly how much you earn per unit at any given price point.
At simple-calculator.online, the markup and margin calculator handles both conversions instantly — enter your cost and either a markup or margin percentage and it returns the selling price, profit per unit, and the equivalent value in the other metric. No spreadsheet needed.
Imagine you run a coffee shop and your cost per cup (ingredients, cup, labor) is $1.20. To achieve a 65% profit margin, you need to price that cup at $3.43. If you mistakenly used a 65% markup instead, you'd only charge $1.98 — and you'd actually be losing money once overhead is factored in. This is exactly why mixing up markup vs margin is a costly mistake in food service and retail.
For wholesale businesses, a common target is a 30–40% gross margin. If your product costs $18 to make and you want a 35% margin, your minimum selling price should be $27.69. Knowing your profit per unit also helps when negotiating bulk discounts — you can see immediately how a $2 cost reduction improves your margin without having to rebuild your pricing spreadsheet from scratch.
Markup is the percentage added to your cost to get the selling price. Margin is the percentage of the selling price that is profit. A 50% markup on a $10 item gives a $15 price with a 33.3% margin — same dollar profit, different percentages.
Use this formula: Margin = Markup ÷ (1 + Markup). For a 25% markup, the margin equals 0.25 ÷ 1.25 = 20%. The calculator on this page does this conversion automatically.
Most retail businesses target a gross margin between 30% and 50%. Grocery stores often run on margins as low as 5–10%, while clothing and electronics can exceed 50%. Your ideal margin depends on your overhead costs and industry norms.