What is the difference between margin and markup?

Both describe the same profit, but against a different base. Margin is profit divided by the selling price; markup is profit divided by the cost. For a $60 cost and a $100 price, the $40 profit is a 40% margin but a 66.7% markup.

How do I calculate price from a target margin?

Divide the cost by 1 minus the target margin as a decimal. For a $60 cost and a 40% target margin, the price is 60 / (1 minus 0.40) = $100. The target-margin mode of the calculator does this for you.

Why can margin never reach 100%?

Margin is profit divided by price, and profit is always less than price as long as there is any cost. Only a zero cost would give a 100% margin, so a target margin of 100% or more has no finite price.

Should I price on margin or markup?

Most businesses think in margin because it ties directly to revenue and profitability. Markup is handy for working up from cost. The key is not to confuse them: a 50% markup is only a 33.3% margin.

Free Tool · Updated June 30, 2026

Margin & Markup Calculator

From cost and price to margin and markup, or from a target margin to the price you must charge. Margin is off the price, markup is off the cost: two numbers people often confuse.

Margin and markup togetherEnter cost and price to see both numbers side by side, so you never mix them up.
Price from a target marginStart from a target margin and a cost to get straight to the price you must charge.
No email, everRun as many costs and prices as you want. Nothing leaves your browser.

Book a Free Audit Margin vs markup

Calculation mode From price to margin, or from a target margin to the price

Cost (USD) What the product costs you

Selling price (USD) What the customer pays

Margin40%$40.00 profit on a $100.00 price

Profit$40.00

Margin40%

Markup66.7%

Margin is profit divided by price; markup is profit divided by cost. A 100% markup is only a 50% margin.

Manage Pricing in Odoo →

Margin vs Markup Explained

Both measure the same profit, but against a different base. Profit is always price minus cost. Margin divides that profit by the selling price; markup divides it by the cost. That is why, for the same product, the markup is always a higher percentage than the margin.

Measure	Formula
Profit	price minus cost
Margin (%)	(profit / price) x 100
Markup (%)	(profit / cost) x 100
Price from a target margin	cost / (1 minus margin/100)

Worked example: a product costs $60 and sells for $100. The profit is $40. The margin is 40 / 100, or 40%. The markup is 40 / 60, or 66.7%. Same profit, two very different percentages, and mixing them up is how people underprice.

Pricing in Odoo Sales

In Odoo, every product carries a cost and a sales price, and pricelists apply your margin or markup rules by customer, quantity, or currency. You can compute a sales price directly from cost using a markup, or track real margin line by line in the sales and inventory reports.

Octura sets up your pricelists, costing, and target margins in Odoo Sales so every quote respects your profitability thresholds without manual math.

Explore Odoo Sales →

Backed by real migrations

Numbers like yours, validated on real migrations

Three engagements where the projection turned into operational reality on Odoo. Read the full case studies on the migration service page.

ManufacturingV12 → V17
Industrial Manufacturer, Texas
12custom modules ported, zero data lost
DistributionV14 → V18
Wholesale Distributor, Quebec
30%faster page loads after the upgrade
Professional ServicesCE → Enterprise
Consulting Firm, Brussels
0hproduction downtime during cutover

Frequently Asked Questions

01What is the difference between margin and markup?
Both describe the same profit, but against a different base. Margin is profit divided by the selling price; markup is profit divided by the cost. For a $60 cost and a $100 price, the $40 profit is a 40% margin but a 66.7% markup.
02How do I calculate price from a target margin?
Divide the cost by 1 minus the target margin as a decimal. For a $60 cost and a 40% target margin, the price is 60 / (1 minus 0.40) = $100. The target-margin mode of the calculator does this for you.
03Why can margin never reach 100%?
Margin is profit divided by price, and profit is always less than price as long as there is any cost. Only a zero cost would give a 100% margin, so a target margin of 100% or more has no finite price.
04Should I price on margin or markup?
Most businesses think in margin because it ties directly to revenue and profitability. Markup is handy for working up from cost. The key is not to confuse them: a 50% markup is only a 33.3% margin.