Mera Hisab
How to calculate profit, margin and markup
Profit = Selling price − Cost price
Margin % = Profit ÷ Selling price × 100
Markup % = Profit ÷ Cost price × 100
Example: you buy an item for ₹800 and sell it for ₹1,000. The profit is ₹200. The margin is 200 ÷ 1,000 × 100 = 20%, and the markup is 200 ÷ 800 × 100 = 25%.
Margin and markup are not the same
Both describe the same ₹200 profit, but margin compares it with the selling price and markup compares it with the cost. Markup is always the bigger number. Confusing the two is a common reason for pricing too low.
| Markup (on cost) | Margin (on selling price) |
|---|---|
| 10% | 9.09% |
| 20% | 16.67% |
| 25% | 20% |
| 33.33% | 25% |
| 50% | 33.33% |
| 100% | 50% |
Finding the selling price you need
- For a markup: Selling price = Cost × (1 + Markup ÷ 100). A ₹800 item with a 25% markup sells for 800 × 1.25 = ₹1,000.
- For a margin: Selling price = Cost ÷ (1 − Margin ÷ 100). To earn a 30% margin on a ₹700 item, sell it for 700 ÷ 0.7 = ₹1,000.
Choose Price for a profit above to do this for any item.
From wholesale to retail price
Each seller in the chain adds a markup to their own cost. If a wholesaler buys at ₹100 and adds 10%, the shop pays ₹110. The shop then adds 20% and sells at ₹132. The customer pays 32% more than the wholesaler's price, not 30%, because each markup is added on top of the last.
Tips for pricing
- Include every cost in the cost price: transport, packing, breakage and any commission, not just the purchase price.
- If you are GST-registered, work with prices without GST, since you get credit for the GST you pay on purchases.
- Check your margin after discounts. A 10% discount on a 20% margin takes away half your profit.
Frequently asked questions
What is the difference between margin and markup?
Markup is profit as a percentage of the cost price; margin is profit as a percentage of the selling price. Buying at ₹800 and selling at ₹1,000 is a 25% markup but a 20% margin.
How do I calculate the loss percentage?
Loss % = (Cost price − Selling price) ÷ Cost price × 100. If you bought for ₹500 and sold for ₹450, the loss is 50 ÷ 500 × 100 = 10%.
How do I convert markup to margin?
Margin = Markup ÷ (100 + Markup) × 100. A 50% markup is 50 ÷ 150 × 100 = 33.33% margin.
Can a margin be 100% or more?
No. A 100% margin would mean the item cost nothing. A markup, however, can be more than 100%: buying at ₹100 and selling at ₹250 is a 150% markup.
Is the information I enter saved anywhere?
No. The calculation happens entirely in your browser. Nothing you enter is sent to our server or stored.