How this calculator works
Markup is a percentage of your cost. Margin is a percentage of your price. Adding 40% to your cost does not give you a 40% margin — it gives you 28.6%, and that gap is where a lot of maker profit quietly disappears.
This calculator does the conversion both ways, so you can set a markup and see the margin it really delivers.
The formula
- Selling price = unit cost × (1 + markup %)
- Markup amount = selling price − unit cost
- Equivalent margin = markup ÷ (1 + markup)
- Profit = selling price − unit cost − (selling price × fee %)
What to watch for
- Markup divides profit by cost; margin divides profit by price. Because price is always larger than cost, the margin is always the smaller number.
- A 100% markup is a 50% margin. A 50% markup is a 33.3% margin. A 40% markup is a 28.6% margin. The two only converge at zero.
- Markup is convenient because you can apply it without knowing the final price. Margin is what actually tells you how much of each sale you keep.
- Selling fees come off the price, not the cost, so they eat into the margin faster than they look like they should on a markup basis.
Common mistakes
- Believing a 40% markup produces a 40% margin. It produces 28.6%.
- Comparing your markup to someone else’s margin and concluding you are ahead.
- Applying markup to material cost only, leaving labour and overhead unpaid.
- Forgetting that marketplace fees are charged on the price, after the markup.
Frequently asked questions
What is the difference between markup and margin?
Markup is profit as a percentage of cost; margin is profit as a percentage of the selling price. If something costs $10 and sells for $14, the markup is 40% ($4 ÷ $10) and the margin is 28.6% ($4 ÷ $14). Same money, two different denominators, and the gap widens as the percentages rise.
What markup do I need for a 50% margin?
A 100% markup — you double the cost. The general conversion is markup = margin ÷ (1 − margin). For a 35% margin you need a 53.8% markup; for a 60% margin you need 150%. If you want to work in margins directly, use the margin calculator instead.
Should I price by markup or by margin?
Margin is usually the better target because it tells you what share of each sale you actually keep, and it is what you compare against your fees. Markup is easier to apply mentally at the bench. Many makers set a margin target, convert it to a markup once, and then use that markup day to day.
Why does my markup not cover my costs?
Usually because the markup is being applied to materials alone rather than to full unit cost. If labour, overhead, packaging and waste are not in the cost you are marking up, no markup percentage will reliably cover them — the shortfall just grows with volume.