Markup and margin are two different percentages that describe the same profit, using the wrong one when pricing a product is a common and costly mistake, this calculator computes both together from whichever inputs you have.
This tool solves for selling price, profit, markup percentage, and margin percentage together, starting from whichever two values you already know, cost plus a markup percentage, cost plus a target selling price, or cost plus a target margin percentage.
Markup is profit as a percentage of cost, margin is profit as a percentage of selling price. Since selling price is always larger than cost (assuming any profit at all), dividing profit by the larger selling price always produces a smaller percentage than dividing by the smaller cost, this is why margin is always numerically lower than markup for an identical profit amount, and mixing the two up when setting prices leads directly to under-pricing.
A business owner aiming for a “50% margin” but accidentally computing a 50% markup will actually achieve only a 33.3% margin, a significant shortfall from the intended target, this happens because the two percentages diverge more the higher they get, making the confusion more costly at higher target percentages, not less.
Markup is profit calculated as a percentage of cost, while margin is profit calculated as a percentage of selling price, since selling price is always larger than cost, margin is always a smaller number than markup for the identical dollar profit.
You’ll end up with a lower actual margin than intended, for example, applying a 50% markup produces only a 33.3% margin, not 50%, this mistake becomes more costly the higher the target percentage, since the gap between markup and margin widens.