Business & Pricing
Markup vs Margin
Markup is cost-based (price / cost). Margin is price-based (profit / price). A 50% markup is a 33% margin — not the same.
View on brothh.comWhat it means
Markup and margin are both pricing metrics but they use different denominators, so the numbers look different even when the math is identical.
Markup = (price − cost) ÷ cost. Margin = (price − cost) ÷ price. A $10 cost item sold at $15 has 50% markup but 33% margin. A $10 cost item sold at $20 has 100% markup ("keystone") but 50% margin.
Examples
$10 cost → $15 price
50% markup = 33% margin
$10 cost → $20 price
100% markup = 50% margin (keystone)
$10 cost → $40 price
300% markup = 75% margin
Do
- Pick one and stay consistent — most retail buyers think in margin; most DIY makers think in markup.
Don't
- Quote a 40% markup to someone expecting 40% margin — you will mis-price by a lot.
Related terms
Calculators that use this
Profit Margin
Gross margin, net margin, and markup — convert between them cleanly so you do not mix up 40% margin and 40% markup.
Cost-Plus Pricing
Set a retail price from your cost and target margin — with a sanity check against competitor pricing.
Wholesale Markup
Price wholesale and retail in lockstep — keystone, MAP-friendly, and key-two markups with gross profit checks.