Margin Calculator
Gross margin and markup from cost and price, or the price that hits a target margin.
Margin vs. markup, the eternal mix-up
margin = profit / price markup = profit / cost
Cost $60, price $100: the $40 profit is a 40% margin but a 66.7% markup. Same deal, two different bases. Mixing them up is expensive in the dangerous direction: applying a '40% markup' when you meant 40% margin prices the item at $84 instead of $100.
Pricing to a target margin
price = cost / (1 - margin)
Not cost × (1 + margin); that's the markup formula. For a 40% margin on a $60 cost: 60 / 0.6 = $100. As the target margin approaches 100% the required price runs to infinity, which is the formula's polite way of saying nothing sells at a 100% margin.