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Margin versus markup calculator

Is it Margin or Markup? Many times you are asked, "What is your markup on that item?" Perhaps this phrase is used because when you lower the price, you take a 'markdown'. This calculator demonstrates the difference in a margin and a markup. To determine your margin, enter information in one of two ways.

You can enter the cost and desired selling price to determine the margin. Or you can enter the cost and desired margin to determine the selling price.

The answer you get for desired selling price is your Gross Margin.While you can use the calculator below to do the math for you. The gross margin states that the cost of the item is a percentage of the selling price of the item. As an example; the item costs $5.00 and is selling for $10,00. The gross margin is 50% because the cost of the item is 50% of what you are selling it for.

Cost of Item: $
Desired Selling Price: $
Desired Gross Margin: (%) %

This is where you calculate the markup of an item. Markup shows the relationship between the cost of the selling price. As in the margin example you can enter the cost and desired markup for an item to get the selling price of an item. Or, you can enter the cost and the selling price of an item to determine the markup. Using the same cost, $5.00, and selling price, $10.00 as above, the markup would be 100% because you are marking up the cost of the product by 100%.

Notice that when you enter the cost in both of these examples and the desired margin or markup, the selling price is going to be different. If you are calculating the markup, the selling price will be lower.

Cost of Item: $  
Desired Markup: (%) %
Desired Selling Price: $
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