Markup to Margin Converter

Set a price from cost plus markup, and see the margin it really delivers.

Buyers think in markup because they start from cost. Finance thinks in margin because it starts from revenue. This converter runs the bridge in the direction pricing actually happens — cost in, markup applied, price out — and shows the margin that will land in the accounts as a result.

Selling price

—

What to charge to achieve the markup you entered.

Resulting gross margin —

Profit per unit —

Updates as you type · nothing leaves your browser

Your numbers

Unit cost

per unit

Landed cost gives the truest answer.

Markup applied

The formula

Price = Cost × (1 + Markup%) · Margin% = Markup% ÷ (100 + Markup%)

Work forward from the markup your buyers apply to the margin your accounts will report.

What it means

Gross Margin — full definition

Read in the glossary

How to use it

1
Enter the cost you will actually be charged against, including freight and duty where relevant.
2
Enter the markup convention your category uses — the multiplier your buyers or price list rules apply.
3
Read the resulting margin and check it against the margin the category is budgeted to deliver.

Where it goes wrong

Markup and margin diverge fast. 25% markup is 20% margin; 100% markup is 50% margin; a 300% markup is only 75% margin. The gap grows with the number.
A single company-wide markup rule guarantees inconsistent margins across categories with different cost structures.

Worked example

Working the bridge in both directions

Cost 18 with a 66.7% markup prices at 30.01 and delivers a 40% margin. Turn it around: to hit a 40% margin from an 18 cost you must mark up by 66.7%, not 40%. Buyers who apply the margin figure as a markup will price at 25.20 and miss target on every unit.

Common questions

What markup do I need for a given margin?

Markup% = Margin% ÷ (100 − Margin%) × 100. For 40% margin, mark up 66.7%; for 50% margin, mark up 100%.

Why does my price list show the wrong margin?

Almost always because the markup rule was populated with margin targets. Check one line by hand — if the reported margin is below target by roughly the square of the rate, this is the cause.

Should markup be applied before or after discount?

Set the list price from markup, then model discounts separately. Discounting erodes margin far faster than it erodes markup, and only the margin view shows that.

Let AWRA do this on your live data

This calculator works on one set of numbers. AWRA OpsHub keeps markup to margin converter results current across every item, supplier and location — automatically.

Book a demo See pricing

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