BUSINESS-MATH
Profit Margin & Markup Price Calculator
Understand the critical difference between Profit Margin (profit as a % of selling price) and Markup (profit as a % of cost price) to accurately price products.
Formula & Methodology
Margin % = (Profit / Selling Price) * 100; Markup % = (Profit / Cost Price) * 100Cost PriceUnit Cost of Goods
Cost to manufacture or acquire inventory.
Selling PriceFinal Sale Price
Price charged to customers.
Practical Worked Example
A retailer buys merchandise for Rs 600 and prices it at Rs 1,000.
01.Gross Profit = Rs 1,000 − Rs 600 = Rs 400.
02.Profit Margin = (Rs 400 / Rs 1,000) × 100 = 40.00%.
03.Markup = (Rs 400 / Rs 600) × 100 = 66.67%.
40% Margin (66.67% Markup)Markup is always higher than profit margin for positive profits.
Interpretation & Industry Benchmarks
Confusing margin with markup is one of the most common pricing mistakes in retail and e-commerce.
50% Margin = 100% MarkupKeystone Pricing
Doubling cost price yields a 50% profit margin.
Industry Nuance: To achieve a target 30% margin, markup must be 42.86% (Cost ÷ 0.70).
Analytical Limitations
- Does not include shipping, returns, payment processing fees, or overhead.
Frequently Asked Questions
What is the key difference between margin and markup?
Margin is profit divided by selling price. Markup is profit divided by cost price.
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Disclaimer: For educational and analytical modeling purposes only. Does not constitute financial or investment advice.