Profit Margin & Markup
Know the difference between margin and markup. Price your products with clarity and confidence.
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Enter the details, review your result, then copy or export. No account and no AI required.
See a real task before you start
Compare cost R100 and selling price R150: gross margin 33.33%, markup 50%.
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Save or export a complete editable draft, including repeated line items. Files and passwords are never included. JSON backups stay on your device unless you choose to share them.
Your result
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Quality checkpoint
- Check whether costs include VAT and delivery
- Confirm the target margin differs from markup
The calculator, builder or download above works independently. AI Assist is an optional explanation and writing helper, never required to complete the core task.
Understand profit margin versus markup
Markup measures profit against cost. Margin measures profit against the selling price. Confusing the two can quietly destroy profitability, especially when a business adds a “30% margin” by multiplying cost by 1.30. Use the same inputs to compare the real difference.
Before you start
Markup compares profit to cost, while margin compares profit to selling price. They answer different questions. Build your price from landed cost, packaging, platform fees and likely losses rather than purchase price alone.
How to use this tool
- Enter what the product or service costs you and what you plan to charge.
- Compare gross profit, markup and gross margin.
- Use a target margin or markup when you need to reverse-calculate a selling price.
A real-world example
An item that costs R100 and sells for R150 has R50 gross profit, 50% markup and 33.33% gross margin.
Gross margin does not automatically account for rent, wages, advertising, payment fees or tax. Include those in a wider pricing decision.
Check this before you finish
- Include every cost that varies with a sale.
- Compare your target margin with competitor pricing and customer value.
- Model discounts before offering them.
What to avoid
A 30% markup is not a 30% gross margin. Confusing them can erode profits quietly.
WHAT THIS TOOL ACTUALLY DOESUse the figures to evaluate pricing; they are not a substitute for a full income statement.
Frequently asked questions
Is a 50% markup a 50% margin?
No. At 50% markup on R100, selling at R150 produces only 33.33% margin.
Can margins be negative?
Yes. Selling below cost produces a loss and a negative gross margin.
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