Finance
Margin and selling price calculator
Calculate gross margin, markup and selling price from cost. Understand the difference between margin and markup.
Currency
Whole numbers, no decimals
Calculate selling price
From cost and desired percentage
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Select the method then enter the percentage:
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Selling price
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Profit
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Actual margin
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Actual markup
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Analyse margins for a price
From cost and actual selling price
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$
Profit
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Margin (on selling price)
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Markup (on cost)
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Multiplier factor
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Key concepts
Margin (gross margin) is calculated on the selling price: margin = (SP − cost) / SP × 100. Markup is calculated on the cost: markup = (SP − cost) / cost × 100. For the same product, markup will always be a higher percentage than margin. Confusing the two is one of the most common mistakes in pricing.
It depends on the type of business: food retail typically operates on margins of 5–15%, while software or professional services can exceed 70%. What matters is covering all fixed and variable costs, not just the product cost. A 30% margin on selling price may look healthy, but if overheads are high, the net profit can still be negative.
Using margin: SP = Cost / (1 − margin%). For example, cost $1,000 with 40% margin: SP = 1,000 / (1 − 0.40) = $1,667.
Using markup: SP = Cost × (1 + markup%). With 40% markup: SP = 1,000 × 1.40 = $1,400. Note that 40% margin and 40% markup produce very different selling prices.
Using markup: SP = Cost × (1 + markup%). With 40% markup: SP = 1,000 × 1.40 = $1,400. Note that 40% margin and 40% markup produce very different selling prices.
The multiplier factor (or price factor) is the number by which the cost must be multiplied to obtain the selling price: factor = SP / cost. It is equivalent to markup expressed as a ratio. For example, if cost is $1,000 and SP is $1,500, the factor is 1.5 (equivalent to a 50% markup). It is widely used in distribution and wholesale to quickly calculate catalogue prices.