Calculate gross profit margin AND markup simultaneously from cost and price. Instantly see the difference between margin and markup with industry benchmarks.
Enter any two values — the calculator will compute the third and show both margin and markup.
Margin and markup are both ways to express profit relative to cost or price, but they're calculated differently and serve different purposes. Confusing them can lead to pricing mistakes.
⚠️ Common Mistake: Mixing up margin and markup
A 50% markup ≠ 50% margin. A 50% markup gives a 33.3% margin. A 50% margin requires a 100% markup. Always clarify which metric you mean.
What is the difference between gross margin and markup?
Gross margin is profit divided by selling price (revenue-based). Markup is profit divided by cost (cost-based). For the same product, markup % will always be higher than margin %. Example: Cost $40, Price $60 → Margin = 33.3%, Markup = 50%.
How do I convert markup to margin?
Margin = Markup ÷ (1 + Markup). Example: 50% markup → 50 ÷ 150 = 33.3% margin. Or use this calculator to see both simultaneously.
What gross margin should I target?
It depends heavily on your industry. SaaS targets 70-80%+, retail typically 30-50%, manufacturing 20-35%. Focus on gross margin trends over time rather than an absolute number, and always benchmark against your industry peers.