Margin Markup Calculator: Convert Between Margin & Markup Fast
Margin and markup aren’t the same. One is profit as a share of price. The other is the uplift on cost. Mix them up and your pricing goes sideways.
This tool converts between them—fast, clean, no spreadsheet.
The Formulas (so you can sanity-check)
- Given margin → markup:
Markup = Margin ÷ (1 − Margin)
Example: If our margin is 38%, we use decimals to calculate like so: 0.38 ÷ (1 − 0.38) = 0.6129 → 61.29%)
- Given markup → margin:
Margin = Markup ÷ (1 + Markup)
Example: For the reverse, when our markup is 61.29%, the calculation work like this: (0.6129 ÷ 1.6129 = 0.38 → 38%)
Quick Examples
Gut-check your numbers with a few common conversions. If yours are far off these patterns, recheck the inputs.
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- 38% margin → 61.29% markup. A typical target for many retail categories.
- 50% margin → 100% markup. Easy mental math; price is double cost.
- 25% markup → 20% margin. Markup always reads higher than the equivalent margin.
Common Gotchas To Avoid
These mistakes are why pricing sheets produce nonsense. Fix them before they spread.
- Wrong field. Using margin when the sheet expects markup—instant underpricing. Label your columns clearly.
- Bad denominator. Margin is profit ÷ price, not profit ÷ cost. Markup is profit ÷ cost. Keep them straight.
- Ignoring promos and fees. Discounts and card fees hit the real margin. Pressure-test with the Discount Impact Simulator and the Payment Processing Fee Calculator.
- Copy-paste drift. One wrong cell reference and every SKU is off. Lock formulas and protect the sheet.
Build Prices That Hold Up
Once the math is clean, protect it in your systems and processes so it stays that way.
- Standardize price math—build rules. Lock your markup/margin formulas in the POS or catalog. If you’re evaluating platforms, start with the best retail POS system.
- Track true COGS—tighten inputs. Clean COGS makes clean margins—see our picks for accounting software with inventory.
- Buy smarter—protect contribution. Better purchasing beats clever pricing; compare inventory management software and inventory optimization software.
- Control promos—set floors. Keep stacking in check and enforce a margin floor; complex calendars benefit from trade promotion management software.
Know What You're Pulling In
Set the direction, type the number, copy the answer.
Then price with discipline—consistent rules, verified COGS, and promo controls. Your margin report will read a lot better.
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