Worked examples
The classic pair
| Cost | $60.00 |
| Selling price | $100.00 |
| Profit margin | 40.0% |
| Markup | 66.7% |
| Profit | $40.00 |
40% margin = 66.7% markup. Same $40, different denominator.
Keystone pricing
| Cost | $50.00 |
| Selling price | $100.00 |
| Profit margin | 50.0% |
| Markup | 100.0% |
| Profit | $50.00 |
Doubling cost (100% markup) always lands exactly at 50% margin.
Frequently asked questions
Why do margin and markup differ for the same sale?
Different denominators. Profit ÷ price = margin; profit ÷ cost = markup. Since price exceeds cost on any profitable sale, the markup percentage is always the larger number — 40% margin and 66.7% markup describe the identical transaction.
Which should I use to run my store?
Margin, for decisions — it is the share of revenue you keep, and it is what ad break-evens, discount math, and financial statements are built on. Markup is a convenient way to *set* prices from cost. Set with markup, manage with margin.
Is there a quick conversion table?
Markup → margin: 25% → 20%, 33% → 25%, 50% → 33.3%, 66.7% → 40%, 100% → 50%, 300% → 75%. The formula: margin = markup ÷ (100 + markup) × 100.
Can margin ever exceed 100%?
No — margin is capped below 100% because cost is always at least something. Markup has no cap: a $2 item sold for $20 is a 900% markup but a 90% margin. If someone reports a "150% margin," they are talking about markup.
Related calculators
- Profit Margin Calculator
- Markup Calculator
- Selling Price Calculator
- Break-even ROAS Calculator
- All calculators
Part of the Pricing & Margins collection.