Markup vs margin converter
Markup is profit as a share of cost. Margin is profit as a share of the sell price. The same sale has both, and they are never the same number. Convert either way, or start from a cost and a price.
From cost and price
The formulas
Margin from markup, with markup as a percentage in B2:
=B2/(1+B2)Markup from margin, with margin in B2:
=B2/(1-B2)Price for a target margin, with cost in B2 and margin in C2:
=B2/(1-C2)The common pricing mistake
To get a 30% margin on a $100.00 cost, many people price at cost x 1.3 = $130.00. That is a 30% markup, and its margin is only 23.1%. The price that gives a 30% margin is $100.00 / 0.70 = $142.86.
Markup to margin table
| Markup | Margin |
|---|---|
| 10% | 9.1% |
| 15% | 13.0% |
| 20% | 16.7% |
| 25% | 20.0% |
| 30% | 23.1% |
| 40% | 28.6% |
| 50% | 33.3% |
| 60% | 37.5% |
| 75% | 42.9% |
| 100% | 50.0% |
Margin to markup table
| Margin | Markup |
|---|---|
| 10% | 11.1% |
| 15% | 17.6% |
| 20% | 25.0% |
| 25% | 33.3% |
| 30% | 42.9% |
| 35% | 53.8% |
| 40% | 66.7% |
| 45% | 81.8% |
| 50% | 100.0% |
Margin when buying and selling off a list price
Trade suppliers often quote a multiplier or discount off a list price, and resellers often sell at a different discount off the same list. The list price then drops out: margin = 1 - (your buy multiplier / your sell multiplier). With the buy multiplier in B2 and the sell multiplier in C2:
=1-B2/C2Example: you buy at 0.65 x list (a 35% discount) and sell at 0.9 x list. On an $80.00 list item that is a $52.00 cost and a $72.00 price: margin 27.8%, markup 38.5%, the same on every item on that list. If the supplier cuts your discount so the buy multiplier becomes 0.68, margin falls to 24.4% unless your sell multiplier moves too. To hold the margin, the sell multiplier has to become 0.68 / (0.65 / 0.9) = 0.942.
When a supplier raises your cost, both numbers move. The margin impact calculator shows by how much, and what price restores them.
Pricecheck takes the supplier's email as it arrives, PDF included, compares it with the last version and sends back only the lines that moved. $49/mo, first month free for early signups. No payment now.