How this number is made
Markup is a percent of cost. Margin is a percent of the selling price. A 50% markup is a 33% margin. This page does the markup. The margin page goes the other way.
- Cost is what the unit costs you, landed.
- Markup is on that cost, not on the price.
Formula
Price = cost × (1 + markup). Margin = markup ÷ (1 + markup).
Worked example
With the figures already in the form, selling price is $60.00.
Questions
Why doesn’t a 50% markup make a 50% margin?
Because the markup is divided by the cost and the margin is divided by the larger price. Fifty on a cost of 100 is a price of 150, and 50 ÷ 150 is 33%.
Where do fees go?
In the cost, if you want the markup to cover them.