A worked example
An item costing $60 sold for $100 earns a $40 profit — a 40% margin, but a 66.7% markup. Same profit, same sale, two genuinely different percentages depending on which base you divide by.
Frequently asked questions
What's the actual difference between margin and markup?
Margin is profit divided by selling price. Markup is profit divided by cost. The dollar profit is identical either way — only the denominator changes, which is exactly why the same situation produces two different-looking percentages.
Why is markup always a higher number than margin (for the same sale)?
Because cost is always lower than price when there's a profit, dividing the same profit by a smaller number (cost) gives a bigger percentage than dividing it by a larger number (price).
This calculator provides general estimates only and is not financial or business advice.