Margin and markup formulas
Profit = selling price − cost
Margin = profit ÷ selling price × 100
Markup = profit ÷ cost × 100
Example
You buy a lamp for 60 and sell it for 100. The profit is 40, the margin is 40 ÷ 100 = 40%, and the markup is 40 ÷ 60 = 66.7%.
Setting a price from a margin
Selling price = cost ÷ (1 − margin)
For a 40% margin on something that cost 60: 60 ÷ 0.6 = 100. A common mistake is to add 40% to the cost (84), which only gives a 28.6% margin.