Free business tool
Markup vs Margin Converter — They Are Not the Same
Markup and margin are two ways of expressing profit — but they produce very different numbers. A 50% markup is only a 33% margin. Confusing the two is one of the most common pricing mistakes in small business, and it can quietly erode your profitability. This converter instantly translates between the two in either direction.
How to use: Enter either your markup percentage or your margin percentage and the tool will instantly convert it to the other.
What is the difference between markup and margin?
Markup is how much you add on top of your cost — expressed as a percentage of the cost. Margin is how much of the final selling price is profit — expressed as a percentage of the selling price. A product costing £60 sold for £100 has a 66.7% markup but a 40% margin. Both describe the same £40 profit, but from different perspectives. When setting prices, margin is generally more useful because it tells you what percentage of every pound of revenue you keep.
Frequently asked questions
Why does it matter which one I use?
If you think you are applying a 50% margin but you are actually applying a 50% markup, your real margin is only 33%. Over thousands of sales, that 17-percentage-point gap represents a significant amount of missing profit. Accountants and financial reports typically use margin. Retail and wholesale buyers often talk in markup. Knowing how to convert between the two prevents costly misunderstandings.
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