Markup and margin both measure profitability, but they use different bases. Markup is the percentage added to your cost. Margin is the percentage of the selling price that is profit. Understanding both is essential for pricing and profitability analysis.
Markup = (Profit / Cost) × 100 — percentage of cost
Margin = (Profit / Price) × 100 — percentage of selling price
Example: $50 cost, $75 price, $25 profit → 50% markup, 33.3% margin
Markup = (Price - Cost) / Cost × 100
Markup tells you what percentage you added to your cost. A 50% markup means you added half of your cost on top.
Example: Cost $50, Price $75
Markup = ($75 - $50) / $50 × 100 = 50%
Margin = (Price - Cost) / Price × 100
Margin tells you what percentage of the selling price is profit. A 33% margin means one-third of your revenue is profit.
Example: Cost $50, Price $75
Margin = ($75 - $50) / $75 × 100 = 33.3%
Same item, same profit — but markup and margin show different percentages:
50% Markup
33.3% Margin
Use this table to quickly convert between markup and margin:
| Markup % | Margin % | Example (Cost $100) |
|---|---|---|
| 10% | 9.1% | Price $110, Profit $10 |
| 20% | 16.7% | Price $120, Profit $20 |
| 25% | 20% | Price $125, Profit $25 |
| 33.3% | 25% | Price $133, Profit $33 |
| 50% | 33.3% | Price $150, Profit $50 |
| 100% (Keystone) | 50% | Price $200, Profit $100 |
| 150% | 60% | Price $250, Profit $150 |
| 200% | 66.7% | Price $300, Profit $200 |
Calculate selling price from cost, or find markup and margin from known prices.
Your cost per unit
Markup percentage on cost
Selling Price
$75.00
Cost
$50.00
Profit
$25.00
Markup
50.0%
of cost
Margin
33.3%
of price
Summary: For every $50.00 you spend, you earn $25.00 profit. That's a 50.0% markup on your cost, or a 33.3% margin on the selling price.
A 30% markup is NOT a 30% margin. If you price at 30% markup expecting 30% margin, you will be short. 30% markup = 23% margin.
Your markup must cover not just product cost, but also operating expenses (rent, labor, marketing). A 50% markup may not leave enough after expenses.
A 20% discount on a 25% margin product wipes out most of your profit. Calculate margin impact before offering discounts.
StockZip inventory management tracks your item costs and helps you maintain visibility into your margins. Set cost prices, track purchase history, and understand your profitability per item.
Common questions about scanning, offline mode, pricing, and migration.
Markup is the percentage added to cost to get the selling price (based on cost). Margin is the percentage of the selling price that is profit (based on price). For the same item, markup percentage is always higher than margin percentage.