Profit margin vs markup calculator

Subtract cost from selling price to get profit, then divide profit by the selling price and multiply by 100. For example, a KSh 1,000 item sold at KSh 1,400 has KSh 400 profit, which is a 28.6% margin (400 / 1,400).

Subtract cost from selling price to get profit, then divide profit by the cost price and multiply by 100. The same KSh 1,000 item sold at KSh 1,400 has a 40% markup (400 / 1,000).

Use markup when pricing from your cost, since it tells you exactly how much to add. Use margin when you want to know how much of every shilling of revenue is actual profit - it is the number most useful for comparing profitability across products.

Markup is profit divided by cost, while margin is profit divided by price, and price is always bigger than cost when there is a profit. Dividing the same profit by a bigger number gives a smaller percentage, so margin is always lower than markup for the same sale.

It varies widely by product and sector - retail resale often runs 15-30% margin, while services and made-to-order goods can run much higher. Compare against your specific costs, competitors, and what customers are willing to pay rather than a single target.

Set the target type to margin and enter 30%. The calculator divides your cost by one minus the margin, so a KSh 1,000 cost needs a KSh 1,428.57 selling price to leave 30% of the sale as profit. Entering 30% as a markup instead gives KSh 1,300, which is why the target type changes the result.

Work out the profit first, then divide it by the other base. A 40% markup on KSh 1,000 is KSh 400 profit; divided by the KSh 1,400 price that profit is a 28.6% margin. In the calculator, enter any cost and price in analyze mode and it shows both percentages side by side, so no manual conversion is needed.

Yes. The calculator measures margin against whatever you enter as cost, so include packaging, delivery, and payment fees in the cost figure for a true reading. Leaving them out shows a higher margin than you actually keep, which can make an unprofitable price look fine.

A margin target of 100% would mean dividing by zero, since no price can keep all of itself as profit. The calculator clamps margin targets at 99% and markup targets at 1,000% so it always returns a usable price. Above those limits the fields simply stop rising.

Set the target type to markup and enter the percentage. The price is your cost multiplied by one plus the markup, so a KSh 1,000 item at a 40% markup target prices at KSh 1,400. The results also show the profit per sale and the margin that the markup implies.