ToolnozaMarkup and margin formulas
Markup (%) = profit ÷ cost × 100. Margin (%) = profit ÷ selling price × 100. To convert markup to margin: margin = markup ÷ (100 + markup) × 100. These percentages differ because one uses cost and the other uses selling price as the base.
Example: 50% markup is not 50% margin
If an item costs 100 and you apply a 50% markup, profit is 50 and selling price is 150. Margin = 50 ÷ 150 × 100 = 33.33%. The Toolnoza calculator converts the markup percentage directly.
Calculate a target selling price
Price = cost × (1 + markup ÷ 100). For a cost of 80 and a 25% markup: 80 × 1.25 = 100. Profit is 20, so margin = 20 ÷ 100 = 20%. Add operating expenses separately when estimating net profit.
Choose the right measure
Use markup to set a price as a percentage above cost. Use margin to describe profit as a share of sales. Neither figure automatically includes rent, payment fees, shipping, taxes, returns or other expenses. Specify whether you mean gross margin or a fuller net margin.
Frequently asked questions
What margin is a 100% markup? 50%. Can margin be higher than markup for positive cost and profit? No, margin is lower because its denominator includes profit. Does a 30% margin mean add 30% to cost? No; a 30% margin requires markup of about 42.86%.