Markup vs margin calculator
You add 60% to your cost. What share of the price do you keep?
The example numbers are from block 2: a phone case bought for $5 and sold for $8. Change them to yours: the numbers stay in this browser and are not sent anywhere.
Result for the example
- Margin in dollars
- $3price - cost of one item
- Markup
- 60%margin / cost x 100
- Margin as % of the price
- 37.5%margin / price x 100
- A markup of 60% is a margin of 37.5% of the price: the same $3, divided by a different base. Markup is always the bigger number.
A simple teaching calculator with the formulas of the course. It leaves out taxes, seasons and much of real life, and it is not financial advice.
How it works
Markup = (price - cost) / cost x 100. Margin % = (price - cost) / price x 100
Markup and margin use the same dollars but divide by different things. Markup is counted on the cost: how much you add on top. Margin is counted on the price: how much of every sale you keep. So the margin % is always smaller than the markup.
A phone case costs $5 and sells for $8. The shop adds $3: a 60% markup ($3 / $5), but only a 37.5% margin ($3 / $8). A 50% markup is a 33.3% margin. If you plan with a markup but think "this share of every sale is mine", you overestimate your margin.
A common mistake: Treating a 50% markup as "half of every sale is mine". Half of the price would be a 100% markup.
Practise this in block 1
Block 1 of Ownwise is free, with no account needed to start: short lessons on costs, margin and break-even, then a made-up case where you make the decisions and see what they lead to.
The full case on this topic is block 2, part of the paid practice pack.