Why is markup always higher than profit margin?
Because markup divides profit by cost (a smaller denominator), while margin divides profit by selling price (a larger denominator).
Selling price from cost price and desired markup percentage.
Calculates the retail selling price and markup percentage required on cost prices to achieve target product profitability.
Selling Price = Cost Price × (1 + Markup / 100) | Markup % = ((Selling Price - Cost) / Cost) × 100
Markup is the percentage added directly to the wholesale cost price to determine final customer retail pricing.
Inputs: Cost Price = ₹800 | Desired Markup = 50%
Summary: Cost Price = ₹800 | Markup = 50.0% | Retail Price = ₹1,200 | Margin Equivalent = 33.33%
Because markup divides profit by cost (a smaller denominator), while margin divides profit by selling price (a larger denominator).
A retail pricing strategy where products are priced at exactly double their wholesale cost (a 100% markup, or 50% margin).
Markup = Margin / (1 - Margin) = 0.25 / 0.75 = 33.33% markup.