Markup vs. margin

Markup is profit as a percentage of cost. Margin is profit as a percentage of the selling price. The same sale has a smaller margin than markup, so a 50% markup does not give a 50% margin.

Example

Say a part costs you $100 and you sell it for $125. Profit is $25. The markup is 25 / 100 = 25%. The margin is 25 / 125 = 20%.

Going the other way, to earn a 40% margin on a $100 cost you divide by (1 - 0.40), so the price is $166.67. That is a markup of about 66.7%, not 40%. Adding 40% to the cost would give $140, a margin of only 28.6%.

Convert between them, or start from a price, with the markup and margin calculator.