Markup vs Margin – What's the Difference?
Markup and margin both describe profit, but they use different bases. Mixing them up leads to wrong prices.
Margin
Margin % = (Profit ÷ Selling price) × 100
Profit is a % of what you sell at.
Cost ₹80, Sell ₹100 → Profit ₹20 → Margin = 20%.
Markup
Markup % = (Profit ÷ Cost price) × 100
Profit is a % of what you paid.
Cost ₹80, Sell ₹100 → Profit ₹20 → Markup = 25%.
Why It Matters
- Margin is what you keep from each rupee of sales
- Markup is what you add to cost
- 25% markup ≠ 25% margin.
Cost ₹100, 25% markup → Sell ₹125. Margin = 20%.
For Pricing
If you want 20% margin: Selling price = Cost ÷ (1 − 0.20) = Cost ÷ 0.80.
If you want 25% markup: Selling price = Cost × 1.25.
Use our Margin Calculator to switch between both. Stockkeeper tracks cost and price per item. Join the waitlist.
Frequently Asked Questions
What is the difference between markup and margin?
Margin is profit as a % of selling price. Markup is profit as a % of cost price. Same profit, different bases. 25% markup = 20% margin when cost is ₹100 and sell ₹125.
Which should I use for pricing - markup or margin?
Use margin when you know your target profit on sales. Use markup when you want to add a % on cost. For 20% margin: selling price = cost ÷ 0.80. For 25% markup: selling price = cost × 1.25.
What is a good margin for kirana stores?
Groceries 5-10%, packaged foods 10-20%, household items 15-30%. Use the Margin Calculator to check your prices.