What is the difference between markup and margin?

Markup is profit as a percentage of cost; margin is profit as a percentage of selling price. Buying at ₹500 and selling at ₹700 is a 40% markup (200 ÷ 500) but a 28.6% margin (200 ÷ 700). Markup is always the larger number for the same sale, which is why the two are often confused.

How do I calculate selling price with a 30% markup?

Multiply the cost by 1.30. A product costing ₹1,200 with a 30% markup sells at ₹1,560, a profit of ₹360 per unit. If instead you want a 30% margin on selling price, divide cost by 0.70: ₹1,200 ÷ 0.7 = ₹1,714.29.

What markup percentage should a retailer use?

It varies by category and turnover speed. Grocery and FMCG items often carry 8% to 20% markup; clothing, footwear and accessories 50% to 100%; jewellery making charges 10% to 25% on metal value; restaurants 200% to 300% on food cost. Start from the margin you need to cover rent and salaries and work back.

Does markup include GST?

No. Apply markup to the pre-tax cost to get a pre-tax selling price, then add GST on top for the invoice. If you claim input credit, the GST on your purchase is not a cost. Under the composition scheme or for exempt sales where credit is blocked, include the GST you paid in your cost before marking up.

How do I convert a markup to a margin?

Margin = Markup ÷ (1 + Markup). A 25% markup is 0.25 ÷ 1.25 = 20% margin; a 50% markup is 33.3%; a 100% markup is 50%. To go the other way, Markup = Margin ÷ (1 − Margin): a 40% margin needs a 66.7% markup.

Markup Calculator

Find the selling price from cost and markup percentage, or the markup from two prices, with margin shown alongside. Free, instant, in rupees.

Free · no login neededMade for India · ₹, GST, UPI, WhatsApp

In short

A markup calculator works out the selling price from the cost price and the markup percentage you want to add. VyaparKit's free markup calculator also runs in reverse from a target margin, showing the selling price, the profit per unit and both the markup on cost and the margin on selling price, so you can price products consistently.

Cost price

₹

Markup %

Selling price

₹0.00

Profit ₹0.00 per unit

Markup0%

Margin0%

How do I price for a target margin?

Price = Cost ÷ (1 − Margin). For a 40% margin on a ₹600 cost: 600 ÷ 0.6 = ₹1,000.

Should GST be included?

Work out your price on the pre-GST amount, then add GST on top. Customers see the inclusive price; your margin is on the base.

About the markup calculator tool

Markup is the amount added to cost to arrive at a selling price, expressed as a percentage of cost. Traders, wholesalers and small manufacturers across India price this way: buy at ₹500, add 40%, sell at ₹700. Retail chains and distributors often express the same idea as a target margin on the selling price instead, and suppliers are asked to quote prices that leave the dealer a fixed margin.

Confusion between the two costs money. A dealer asked to leave a 40% margin for a retailer who marks up cost by 40% gives away far less than the retailer expects, and the argument surfaces after the goods have shipped. Spreadsheet formulas written as cost × 1.4 also break silently when someone needs a margin instead. The markup calculator has a switch for 'By markup %' and 'By target margin %', so both parties can enter their number and see the same selling price.

Once the price is fixed, save it against the item in VyaparKit's product master; quotations, sales orders and GST invoices then pick it up automatically.

How to calculate selling price from cost and markup

1
Pick the pricing method
Choose 'By markup %' if you add a percentage to cost, or 'By target margin %' if you need a certain margin on the selling price.
2
Enter the cost price
In 'Cost price' type the landed cost per unit, including freight and any non-creditable tax.
3
Enter the percentage
Type the markup in 'Markup %' or the desired margin in 'Target margin %'. Decimals like 12.5 are accepted.
4
Read the selling price
The large figure is the selling price per unit before GST, with the profit per unit shown under it.
5
Compare markup and margin
The breakdown lists both the markup on cost and the margin on selling price for the same price, useful when negotiating dealer terms.

The formula, with a worked example

Selling price = Cost × (1 + Markup ÷ 100). For cost ₹500 at 40% markup: 500 × 1.4 = ₹700, profit ₹200 per unit.
Margin on that sale = Profit ÷ Selling price = 200 ÷ 700 = 28.6%. A 40% markup is only a 28.6% margin.
Selling price from a target margin = Cost ÷ (1 − Margin ÷ 100). For cost ₹600 and a 40% target margin: 600 ÷ 0.6 = ₹1,000, profit ₹400.
The markup implied by that target is 400 ÷ 600 = 66.7%. To earn a 40% margin you must mark up cost by two-thirds.
Markup from margin: Markup = Margin ÷ (1 − Margin). Margin from markup: Margin = Markup ÷ (1 + Markup). A 100% markup equals a 50% margin.
A 100% margin is impossible (the cost would have to be zero), which is why the calculator caps target margin below 100%.
Add GST after the markup. A ₹700 selling price at 18% GST becomes ₹826 on the invoice; the ₹126 tax is not part of your markup.
Landed cost should include freight, packing and non-creditable GST, otherwise the markup overstates the real profit.

Who uses the markup calculator

Wholesalers and distributors

A garment wholesaler in Tirupur adds a 15% markup on factory cost for bulk buyers and 35% for smaller shops, using the calculator to set both price lists.

Retail shops setting shelf prices

A mobile accessories shop in Lucknow marks up chargers and cases by 60% and checks the resulting margin against the MRP printed on the pack.

Service businesses reselling parts

An AC repair firm bills spare parts at cost plus 25% and labour separately on its service invoice.

Importers and resellers

A Delhi importer converts landed cost per unit in rupees and applies a 30% markup to quote to dealers across the country.