Business
Markup vs Margin Calculator
Convert a markup percentage into margin, or the other way around, and see the selling price from cost.
Convert markup and margin
Retail buyers often talk margin; some suppliers quote markup. If cost is £50 and you want 30% margin, the price is £71.43, which is a 42.9% markup. This calculator converts between the two percentages so negotiations do not talk past each other. Confusing the terms is one of the fastest ways to underprice wholesale deals. Set list prices directly with reverse margin and verify deals with gross margin. Wholesale chains sit on wholesale price and retail price. Arithmetic only — not pricing advice. Put the conversion on a shared slide in buyer meetings so nobody ‘hears’ the friendlier percentage by accident. Train junior buyers to ask ‘margin or markup?’ before they accept a verbal deal. When contracts state one term and invoices imply another, reconcile in writing before stock ships. Put the conversion on a shared slide in buyer meetings so nobody hears the friendlier percentage by accident. Train junior buyers to ask margin or markup before they accept a verbal deal. When contracts state one term and invoices imply another, reconcile in writing before stock ships and the mismatch becomes a credit-note fight.
Worked example
Cost £50, target 30% margin → price = 50 ÷ (1 − 0.30) = £71.43. Markup on cost = 21.43 ÷ 50 = 42.9%. If a supplier offers ‘40% markup’ on £50, price is £70 — which is only about 28.6% margin. Saying yes to ‘40%’ without asking which language they mean can quietly shrink your keep.
Limits and assumptions
Conversion assumes one cost and one selling price. Fees, VAT and multi-tier chains need extra steps. Not a substitute for written trading terms.
Frequently asked questions
How do I convert markup to margin?
Margin = markup ÷ (1 + markup) when both are decimals. Example: 50% markup → 0.5 ÷ 1.5 = 33.3% margin.
How do I convert margin to markup?
Markup = margin ÷ (1 − margin). Example: 40% margin → 0.4 ÷ 0.6 ≈ 66.7% markup.
Which should I use when talking to retailers?
Ask which language they use. Many UK retailers think in margin; some wholesalers default to markup.
Can markup exceed 100%?
Yes — it means profit exceeds cost. Margin cannot reach 100% without a zero cost.
Does this include VAT?
Convert on a consistent ex-VAT or inc-VAT basis. Mixing bases breaks the percentages.