HustleNumbers

· 5 min read · Pricing

Profit Margin vs Markup (With Examples)

Short answer: Margin is profit ÷ selling price. Markup is profit ÷ cost. The same profit dollars produce different percentages. If cost is $60 and price is $100, profit is $40 — that is 40% margin and about 66.7% markup. Always say which one you mean.

Definitions

  • Profit = selling price − cost
  • Margin = profit ÷ selling price
  • Markup = profit ÷ cost

Teams often say “we need 50% margin” when they mean “50% markup.” That mix-up changes pricing. Use the Profit Margin & Markup Calculator to convert instantly.

How to use the calculator

  1. Enter cost per unit and selling price.
  2. Read profit, margin %, and markup %.
  3. Adjust price until the margin or markup matches your target language.

FAQ

Which should I put on a rate card?

Be explicit: “40% gross margin” or “50% markup on cost.” Ambiguity creates disputes.

Do marketplace fees change margin?

Yes in real life. This calculator is cost-and-price arithmetic only. Layer marketplace or processor fees with those dedicated tools after you have a sticker price.

Profit Margin & Markup CalculatorConvert between margin and markup Hourly Rate CalculatorPrice your time Marketplace Fee ComparisonFees after sticker price

Informational only. Disclaimer.