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Margin Calculator
This margin calculator shows the profit margin and markup on anything you buy and sell. Enter the cost price and the selling price to see your profit, your margin percentage and your markup percentage. Or switch the mode, type in the margin you want, and let the calculator work out the selling price you need to charge.
| Cost price | |
| Selling price | |
| Profit | |
| Profit margin (on selling price) | |
| Markup (on cost price) |
How to use this margin calculator
- Pick a mode at the top: work out margin and markup from two prices, or find the selling price from a target margin or markup.
- Enter the cost price — what the item costs you, including any packing or delivery you pay for.
- Enter the selling price, or the percentage you want to earn.
- Read the result: your profit in rupees, the margin percentage and the markup percentage, side by side.
- Try a few prices. A small price change moves the margin more than most people expect.
How margin and markup work
Margin and markup describe the same profit in two different ways, and mixing them up is one of the most common pricing mistakes in small business. Both start from the same two numbers: what an item costs you and what you sell it for. The profit is simply the difference. The two percentages differ only in what you divide by.
Margin divides the profit by the selling price. It answers the question: out of every ₹100 the customer pays me, how much do I keep as profit? Accountants and bank loan officers usually talk in margins, because the selling price is the money that actually comes in.
Markup divides the profit by the cost price. It answers a different question: by what percentage did I increase the cost to reach my price? Shopkeepers often think in markup because they start from the wholesale cost and add something on top.
The two are linked. A markup of 25% always gives a margin of 20%, a markup of 50% gives a margin of 33.33%, and a markup of 100% (doubling the cost) gives a margin of 50%. If a supplier or a partner quotes you a percentage, always ask which one they mean — the difference on a large order is real money.
Worked example
A shopkeeper buys a jacket for ₹800 and sells it for ₹1,000.
- Profit = ₹1,000 − ₹800 = ₹200
- Margin = ₹200 ÷ ₹1,000 × 100 = 20%
- Markup = ₹200 ÷ ₹800 × 100 = 25%
Now run it backwards. If the same shopkeeper starts with the ₹800 cost and wants a 20% margin, the price must be 800 ÷ (1 − 0.20) = ₹1,000 — exactly where we started. Enter these numbers in the calculator and you will see the same results. Notice that adding 20% to the cost would have given only ₹960, which is a 16.67% margin, not 20%.
Margin-to-markup quick table
| If your markup is | Your margin is | If your margin target is | You need a markup of |
|---|---|---|---|
| 10% | 9.09% | 10% | 11.11% |
| 20% | 16.67% | 20% | 25% |
| 25% | 20% | 30% | 42.86% |
| 33.33% | 25% | 40% | 66.67% |
| 50% | 33.33% | 50% | 100% |
| 100% | 50% | 60% | 150% |
The table assumes a single item with no other costs. In real life, transport, packing, marketplace fees and GST handling all eat into the margin, so many sellers first add those costs to the cost price and then calculate.
Frequently asked questions
What is the difference between margin and markup?
Margin is your profit as a percentage of the selling price, while markup is your profit as a percentage of the cost price. If an item costs ₹800 and sells for ₹1,000, the profit is ₹200. The margin is 200 ÷ 1,000 = 20%, and the markup is 200 ÷ 800 = 25%. Because the selling price is bigger than the cost, the margin percentage is always smaller than the markup percentage on the same sale.
How do I find the selling price for a target margin?
Divide the cost by (1 − margin ÷ 100). For a cost of ₹800 and a target margin of 20%, the selling price is 800 ÷ (1 − 0.20) = 800 ÷ 0.80 = ₹1,000. A common mistake is to add 20% to the cost, which gives ₹960 — that is a 20% markup, not a 20% margin, and it leaves you short.
Can the margin be more than 100%?
No. Margin is profit divided by the selling price, and profit can never be more than the full selling price, so margin is always below 100%. Markup has no such limit — if you buy something for ₹100 and sell it for ₹350, your markup is 250%. If a calculator ever shows a margin above 100%, the cost and price have been entered the wrong way round.
What is a good profit margin for a small business?
It depends on the trade. Grocery and general retail often work on margins of 5–15%, clothing commonly 30–50%, and services can be higher because there is little stock cost. What matters is that the margin covers your rent, staff, delivery and other running costs, not just the cost of the item itself. Compare your margin with others in the same line of business, not across industries.
What happens if I sell below cost?
Then the profit is negative and the calculator shows a loss: the margin and markup are negative percentages. Shops sometimes do this on purpose for a clearance sale or to bring customers in, but it should be a planned decision, not a surprise. Check any price that gives a negative result before you print the label.