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Enter cost and selling price to get profit, gross margin and markup — and to keep the two percentages straight, because mixing them up is the classic pricing error. Margin is profit as a share of revenue; markup is profit as a share of cost. A $60 cost sold at $100 is a 40% margin but a 66.7% markup — same sale, very different numbers.
Frequently asked questions
What's the difference between margin and markup?
Margin = profit ÷ revenue. Markup = profit ÷ cost. Pricing "at 40% markup" when the boss meant "40% margin" underprices: 40% margin on $60 cost means selling at $100, but 40% markup means $84.
How do I price for a target margin?
Divide cost by (1 − target margin). For a 40% margin on a $60 cost: 60 ÷ 0.6 = $100. Don't multiply cost by (1 + margin) — that computes markup and lands short.
Is this gross or net margin?
Gross — revenue minus direct cost, before overheads, shipping, fees and tax. Net margin subtracts everything else and is always lower; healthy gross margin is what funds the rest.