Free tool
Margin and markup calculator
They are not the same number, and mixing them up costs money.
- Profit per item
- 25
- Margin (of the price)
- 20%
- Markup (on the cost)
- 25%
- Price for that margin
- 142.86
- Your margin after the discount
- 11.11%
- Extra sales for the same profit
- 100%
An estimate for information only, not legal or tax advice. Nothing you type here is sent anywhere.
Margin is profit as a share of the selling price; markup is profit as a share of the cost. An item that costs 100 and sells for 125 has a 25% markup but only a 20% margin. Price from your target margin, not your markup: to earn a 30% margin on a cost of 70, the price is 70 ÷ 0.70 = 100, not 91.
What a discount really costs
A discount comes straight out of your margin. On a 30% margin, a 10% discount leaves 20 of every old 100 instead of 30, so you need 50% more sales just to earn the same profit. That is why small discounts are expensive.
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