Markup vs Margin Converter

Both numbers describe the same profit on the same sale; they just divide it by different bases. Markup = (price - cost) / cost, so the denominator is what you paid. Margin = (price - cost) / price, so the denominator is what the customer paid. On a $50 cost sold at $100, the profit is $50. Divide by $50 cost and you get a 100% markup. Divide by $100 price and you get a 50% margin. The dollars never change; only the share you choose to report does.

The conversion is exact, no rounding needed. To go from markup to margin: margin = markup / (1 + markup), with both written as decimals. A 25% markup becomes 0.25 / 1.25 = 0.20, so 20% margin. To go the other way: markup = margin / (1 - margin). A 40% margin becomes 0.40 / 0.60 = 0.667, so 66.67% markup. The converter applies these formulas directly, so any markup percent maps to one and only one margin percent.

It would require selling something at infinite price. A 100% margin means profit equals revenue, which only happens if cost is zero. A 100% markup means profit equals cost. Same $50 cost: a 100% markup gives a $100 selling price ($50 cost + $50 profit), and that $50 profit is half of the $100 sale, so the margin is 50%, not 100%. Anyone quoting 100%+ margins on positive-cost goods is either talking about markup or making a math error.

Apparel runs around 50% gross margin (think $40 on a $80 t-shirt). Grocery is famously thin at roughly 25% gross and only 1 to 3% net after labor and overhead. Restaurants target 60 to 70% gross margin on food because labor, rent, and waste eat most of it. Jewelry can exceed 50% because of slow turnover. For reference: Apple runs around 38% gross margin, Tesla around 18%, Walmart around 24%. SaaS sits at 70 to 85%. Compare like-with-like before deciding if your number is good or bad.

Margin tells you what share of every revenue dollar becomes profit, which is the same denominator no matter what you sell. That makes it comparable across products, companies, and industries. Markup uses cost as the base, so a high markup on a cheap input can look impressive while leaving very little dollar profit, and a low markup on an expensive input can still produce strong absolute profit. Investors, analysts, and accountants almost always report margin for that reason. Markup is operationally useful at the point of pricing; margin is the right number for measuring profitability.