Free Online Calculators
Calculate selling price, markup and margin
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.