True Margin vs. Markup Calculator
Calculate profit margin, markup percentage, and gross profit from cost and selling price.
True Margin vs. Markup Calculator
Essential for retail pricing strategy
Calculate profit margin, markup percentage, and gross profit from cost and selling price.
What did you pay for the item?
What are you selling it for?
Profit Analysis
Profit Margin %
33.33%
Percentage of revenue that is profit
Markup %
50.00%
Percentage increase from cost
Gross Profit per Unit
$5.00
Actual dollar profit per sale
Understanding Margin and Markup
Profit margin and markup are two different ways to measure profit. Margin is a percentage of revenue, while markup is a percentage of cost. Understanding both helps you make better pricing decisions for your retail business.
For example, if an item costs $10 and you sell it for $15, your markup is 50% (increase from cost), but your profit margin is only 33% (profit as % of revenue). Higher margins are healthier for your business.
Formulas:
- Profit Margin % = (Profit ÷ Selling Price) × 100
- Markup % = (Profit ÷ Cost) × 100
- Gross Profit = Selling Price - Cost
💡 Pro Tip for Retailers:
A healthy profit margin depends heavily on your industry. Retailers typically aim for a 50% gross margin (a 100% markup), also known as keystone pricing.
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