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Margin versus markup calculator from Profits Plus

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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MAY 2025
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BOOK US

With over 25 years of frontline experience Tom Shay is America's leading Small Business Management Expert. He's a "Must Have" for your next event.

Small Business

Advisories

Using an experience with baseball's spring training, we are asking the question of being a hero to your customers. Did you know that the post office has a higher rating of customer service?

Small Business

News

 

Top Story

Is it, "lead, follow, or get out of the way"? Perhaps in some cases, it is. Definitely it is, "you either lead by example, or you don't lead at all"


Article of the Month

"Traits of the great" is the title of the May Article of the Month. It was written in two parts (second part comes in June) as answer to a small business owner asking what her fellow small business owners did.


Book of the Month

Business the Bill Gates Way is the title of our May article of the month. We had the opportunity to speak with someone who is a neighbor to one of the original 12 Microsoft employees. We thought that was a good prompt to suggesting this book.