How this calculation works
Markup describes how much a selling price exceeds its cost base. It is useful when checking a supplier quotation or a price built from landed product cost. This tool also shows margin so that a cost-based percentage is not mistaken for the share of sales retained. Use a selling price excluding tax collected for the government when comparing operating profitability.
Worked example
This example uses illustrative inputs. Your current result is shown above.
An item costing ₹500 and selling for ₹750 earns ₹250 before other costs. Markup is ₹250 ÷ ₹500 × 100 = 50%; margin is ₹250 ÷ ₹750 × 100 = 33.33%. The same ₹250 profit has different percentages because the denominators differ.
Assumptions and limits
- Both cost and selling price must be positive and refer to the same unit or batch.
- Packaging, commissions and delivery affect the answer only if included in your cost basis; tiered discounts and sales volumes are not modelled.
Questions people ask
Does a 50% markup mean a 50% margin?
No. A 50% markup makes price 1.5 times cost, so profit is one-third of sales.
Which cost should I enter?
Use the cost basis relevant to your decision, such as purchase plus freight and packaging per unit. Keep that basis consistent when comparing prices.