Enter a cost and a selling price to see the profit, the markup, and the margin — and the difference between them.
Markup and margin both describe the profit on a sale, and they use the exact same dollar figure — but they divide it by different things, so they are never the same percentage. Mixing them up is one of the most common and costly pricing mistakes a retailer or online seller can make, because a price set with the wrong one leaves money on the table.
Markup is measured against your cost. It answers "how much did I add on top of what I paid?" Margin is measured against your selling price. It answers "how much of each dollar I take in is profit?" Because the price is always higher than the cost, the margin percentage is always smaller than the markup percentage for the same product.
Say an item costs you $10 and you sell it for $15. The profit is $5. As a markup, that $5 is 50% of the $10 cost. As a margin, the same $5 is only 33.3% of the $15 price. Both are correct — they just answer different questions. If a supplier promises "40% margin" and you apply 40% as a markup instead, you will undercharge on every unit.
Use markup when you are building a price up from a known cost — it is the quickest way to set a shelf price. Use margin when you are analysing profitability, comparing products, or reporting to stakeholders, because margin shows what share of revenue you actually keep. Healthy businesses track both for every product, and this calculator gives you the two figures side by side from a single cost and price.
Both measure profit, but against different bases. Markup is profit as a percentage of cost; margin is profit as a percentage of the selling price. A 50% markup on a $10 cost gives a $15 price — but that is only a 33% margin, because $5 profit is a third of the $15 price.
Subtract the cost from the selling price to get the profit, divide by the cost, and multiply by 100. Price $15, cost $10: (15 − 10) ÷ 10 × 100 = 50% markup.
Take the same profit and divide by the selling price instead of the cost. Price $15, cost $10: (15 − 10) ÷ 15 × 100 = 33.3% margin.
Because the selling price is always larger than the cost, dividing profit by the price gives a smaller percentage than dividing by the cost. Confusing the two is a common pricing mistake that quietly erodes profit.
Use markup to set a price from a cost, and margin to judge profitability and compare products. Many businesses set prices by markup but report performance by margin, so it pays to know both figures for every item.