- Margin or markup? Not the same thing.
- Same numerator, different denominator. Markup = profit ÷ cost (multiplier on your cost). Margin = profit ÷ revenue (slice of the sale). Same dollar profit. Different math. Margin tells you what fraction of each sale you keep. Markup tells you the multiplier you applied to cost. Setting a price from a cost? Use the Markup Calculator.
- What's the formula?
- Profit = Revenue − Cost. Margin% = Profit ÷ Revenue × 100. Markup% = Profit ÷ Cost × 100. The calculator shows all three side-by-side so you never have to convert between them.
- Why does a 50% margin equal a 100% markup?
- Because the denominators differ. If revenue is $200 and cost is $100, profit is $100. Profit ÷ revenue = 100 ÷ 200 = 50% (margin). Profit ÷ cost = 100 ÷ 100 = 100% (markup). Same $100 profit, two perfectly valid percentages — and the reason vendors quote one or the other depending on which sounds better.
- How do I convert between margin and markup?
- Markup% = Margin% ÷ (1 − Margin%). Margin% = Markup% ÷ (1 + Markup%). The identity that lets you translate one vendor's quote into the other. A 40% margin is a 66.67% markup. A 50% margin is a 100% markup. A 75% margin is a 300% markup.
- What's the difference between gross margin and net margin?
- Gross margin uses cost of goods sold (COGS) — direct cost of producing the unit. Net margin subtracts operating expenses, taxes, interest, and everything else. This calculator computes whatever margin you enter the cost for; use COGS for gross margin or total costs for net margin.
- What if cost is higher than revenue?
- Profit is negative, margin is negative, markup is negative. The calculator surfaces the loss with a soft note. Worth knowing when a product line isn't pulling its weight — selling more at those numbers makes you lose more, not less.
- Is there a catch?
- There isn't one. QuickBooks wraps this behind a $30/month accounting suite. NetSuite wraps it in a six-figure ERP contract. The math is one subtraction and one division.
