Pricing & profit
Markup vs margin
Markup and margin describe the same rupee profit against two different bases. Markup divides by cost; margin divides by selling price. That single difference is why a shop applying a "40% markup" is often surprised to report a 28.6% margin.
Both formulas
Markup % = (Selling price − Cost) ÷ Cost × 100
Margin % = (Selling price − Cost) ÷ Selling price × 100
Example. Cost ₹1,000, selling price ₹1,400. Profit is ₹400. Markup = 400 ÷ 1,000 = 40%. Margin = 400 ÷ 1,400 = 28.6%. Same sale, two numbers — check both in the markup calculator and the margin calculator.
Conversion table
| Markup | Selling price on ₹1,000 cost | Margin |
|---|---|---|
| 10% | ₹1,100 | 9.1% |
| 20% | ₹1,200 | 16.7% |
| 25% | ₹1,250 | 20.0% |
| 33.3% | ₹1,333 | 25.0% |
| 50% | ₹1,500 | 33.3% |
| 100% | ₹2,000 | 50.0% |
Margin % = Markup ÷ (100 + Markup) × 100
Markup % = Margin ÷ (100 − Margin) × 100
When to use which
| Use markup when | Use margin when |
|---|---|
| Setting shelf prices from purchase cost | Reporting performance to a lender or partner |
| Applying a standard uplift across a category | Comparing product lines against each other |
| Negotiating with a supplier or distributor | Setting a minimum floor before discounting |
If you want to go straight from cost to a price that hits a target margin, use the selling price calculator — it removes the conversion step entirely.
What a discount does to each
Discounts hit margin faster than owners expect, because the discount comes entirely out of profit. On ₹1,000 cost and ₹1,400 price, a 10% discount drops the price to ₹1,260 — profit falls from ₹400 to ₹260 and margin from 28.6% to 20.6%. That is a 35% cut in profit for a 10% cut in price.
Model offers before announcing them with the discount calculator and read how to calculate profit margin.