Margin and markup calculator with multiplier
Margin, markup and multiplier, without confusing them
Margin
€15.00
Markup on cost
150.0 %
Margin on selling price
60.0 %
Multiplier
2.50
What price hits a given margin
Selling price to apply
€20.00
Markup is calculated on the cost price, margin on the selling price. A 100 % markup equals a 50 % margin.
Work in net figures on both sides. A net purchase compared with a gross sale gives a false, flattering margin.
Everything is computed in your browser. Nothing is stored.
Markup and margin get confused constantly, including in professional documents. Markup is calculated on the buying price, margin on the selling price, and the gap between the two is far from trivial: a hundred per cent markup is a fifty per cent margin. This calculator shows all four indicators at once so the confusion has nowhere left to live.
How to use it
How it works
Enter two values
Buying and selling price, or buying price and target rate: the rest follows automatically.
Read the four indicators
Margin in currency, markup on cost, margin on selling price and the multiplier, each with its formula.
Test a target
Set the rate you want and the calculator gives the selling price to apply, which is the most useful direction day to day.
Worth knowing
Four things to keep in mind
Markup on cost, margin on sale
That is the whole difference. An item bought at 10 and sold at 20 shows a hundred per cent markup and a fifty per cent margin. Both figures are right, they do not measure the same thing.
The multiplier is the most practical view
Multiplying the buying price by 2.5 is quicker to apply than a percentage, especially across a whole catalogue. That is why retail often thinks this way.
Work in net figures
Mixing a net buying price with a gross selling price produces a false, flattering margin. VAT is not revenue, it passes through your cash flow.
Gross margin does not pay the rent
Between gross margin and profit sit rent, wages, energy and unsold stock. A comfortable margin can hide a loss-making business.
FAQ
Frequently asked questions
Margin divided by the buying price, times a hundred. Margin on selling price is margin divided by the selling price, times a hundred.
Markup equals margin divided by one minus the margin. A forty per cent margin on the selling price is therefore about a sixty-seven per cent markup on cost.
In the buying price, yes, along with duties and handling. The cost of an item is not the price the supplier invoiced.
It depends entirely on the sector: a few per cent in food distribution, several hundred in some services. The useful comparison is with your own sector, not a general average.
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