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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 2026
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Small Business

AdvisoriES


"It's all fun and games", is the title of the May Small Business Advisory. Too many employees think the business owner is simply renting their time. Showing up is sufficient.

 

This month's advisory shares a series of engaging activities that remind, and reward, employees that making the sale is what creates their pay check.

Small Business

NewS

Top Story

Meeting with the accountant in February before the tax return is due. I am not sure how this became a tradition. There is nothing you can do to change the numbers for 2025.

 

Why not meet in May, instead? One-third of the year would be completed, and a May meeting would allow for a discussion about what can and should be changed for the last eight months of 2026.

Article of the Month

The article of the month for May is titled, "No more tears". The discussion focuses on inventory which is a great investment in your business. But, only if you know how to manage the "open to buy" and will monitor the inventory turn rate.


Book of the Month

Mindset by Carol S. Dweck, PhD. As one who has found over the years that many of the problems in a small business occur because of the mindset of the owner of the business, this book is a must read.

All this plus the Internet Tool for Your Business and a staff incentive idea for your business.
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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

The April Small Business Advisory quotes research performed by a faculty member at Purdue. The question was asked of 20,000 people, "What do you want in an experience with a business?".

 

The advisory shares the top five answers, for which the majority require the skills that only a human can have. It is not artificual intelligence or software that deals with customer service management.

Small Business

News

 

Top Story

It has been many years since we received an email from Ron of Arrow Floor Covering. Yet we still read it time and again as there are words of wisdom in his message.

 

Would the next generation want to work in your small business?


Article of the Month

Owning a small business has a lot of similarities to owning a small business. Not so much because of the hours you spent with the business, but because of the commitment you are making to yourself, your employees and your customers.

 

The April Article of the Month is titled, "With this ring, I thee wed".


Book of the Month

Everything in the April edition of Small Business News has a tie to the connection of you and your employees to your business. The same is true with this month's book suggestion which is, "Hit Refresh" by Satya Nadella, chairman and CEO of Microsoft.

 

All this plus the Internet Tool for Your Business and a staff incentive idea for your business.