The conversion table
| Markup | Margin | | --- | --- | | 25% | 20% | | 50% | 33.3% | | 100% | 50% | | 200% | 66.7% | | 400% | 80% |
Markup is always the larger number, because cost is always smaller than price.
Why it matters in practice
A retailer told to hold a 40% margin who applies a 40% markup sells at 84 when the correct price is 100. Every unit is 16 short, on every sale, and the shortfall only surfaces when someone reconciles gross profit against the plan.
The reverse mistake — applying a margin percentage as a markup — overprices and loses sales instead of money, which is at least easier to spot.
Pricing up from cost
Markup is the natural way to price when cost is the input: you know what you paid and you add a multiplier. Margin is the natural way to report, because revenue is the base every other figure in a P&L uses. Both are correct; using one where the other is meant is not.
Questions
What is the difference between markup and margin?+
Both describe the same profit against a different base. Markup is profit as a share of cost; margin is profit as a share of the selling price. Cost 60, price 100 is a 66.7% markup and a 40% margin — the same 40 of profit, two very different numbers.
Which one should I quote?+
Markup when you are pricing up from cost, margin when you are reporting profitability. Confusing them systematically understates profit in reports or underprices goods — and the error grows with the percentage.
Is a 100% markup the same as a 100% margin?+
No, and this is where the confusion becomes expensive. A 100% markup doubles the cost and gives a 50% margin. A 100% margin would mean the goods cost nothing.
How do I price for a target margin instead?+
Use the [profit margin calculator](/t/profit-margin-calculator) — it divides by one minus the margin rather than multiplying by the markup.