What is the difference between margin and markup?

Margin is profit as a percentage of selling price (revenue), while markup is profit as a percentage of cost. A 50% markup equals a 33.33% margin.

How do I calculate profit margin?

Profit Margin (%) = ((Revenue - Cost) / Revenue) × 100. For example, if you sell for 150 what cost you 100, margin = ((150-100)/150) × 100 = 33.33%.

Profit Margin Calculator — Free Online Profit Margin & Markup Calculator

Revenue & Cost Details

Profitability Breakdown

Cost Price 0

Revenue (Selling Price) 0

Profit 0

Profit Margin 0%

Markup 0%

Margin % Markup % Multiplier

What is Profit Margin?

Profit margin is the percentage of revenue that remains as profit after deducting costs. It measures how efficiently a business converts revenue into profit.

A higher margin means the business retains more from each unit of revenue. Profit margin is a key indicator of business health and pricing strategy effectiveness.

Formulas

Profit:

Profit = Revenue − Cost

Profit Margin (%):

Margin = (Profit ÷ Revenue) × 100

Markup (%):

Markup = (Profit ÷ Cost) × 100

Margin vs Markup

Margin: Profit as a percentage of the selling price (revenue). Always less than 100%.
Markup: Profit as a percentage of the cost price. Can exceed 100%.
Example: Cost = 100, Revenue = 150. Margin = 33.33%, Markup = 50%.
Conversion: Margin = Markup / (1 + Markup). Markup = Margin / (1 − Margin).

Industry Benchmarks

Retail: 3-5% net margin is typical.
Software: 20-40% net margin is common.
Restaurants: 3-9% net margin on average.
Manufacturing: 5-10% net margin depending on sector.

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