Nexavorix
01
I know my cost and my price
Work out what you are actually making.
Gross profit
--
Margin
--
profit ÷ price
Markup
--
profit ÷ cost
Enter a cost and a price.
02
I know my cost and the margin I want
Work out what to charge.
Charge this
--
Which is a markup of
--
Enter a cost and the margin you want.
Same profit, two denominators
Buy for $100, sell for $150. The profit is $50 either way — but markup measures that $50 against what you paid ($50 ÷ $100 = 50%), while margin measures it against what you charged ($50 ÷ $150 = 33.3%).
The expensive mistake is pricing by multiplying cost by your target margin. To hit a 40% margin you don’t add 40% — you divide by 0.6, which is a 66.7% markup. Add 40% instead and you land at a 28.6% margin and wonder where the money went.
| If your markup is | Your margin is |
|---|---|
| 15% | 13.0% |
| 25% | 20.0% |
| 50% | 33.3% |
| 75% | 42.9% |
| 100% | 50.0% |
| 150% | 60.0% |