Markup to margin converter

How to use it

Enter your figures above — the result updates instantly and nothing leaves your browser. Results are illustrative, not a quote, tax computation or credit decision.

How to interpret the result

The converter shows two figures side by side: the selling price your markup produces, and the gross margin that price actually implies. Because margin is measured against the selling price rather than the cost, a healthy-sounding markup usually converts into a noticeably lower margin percentage. If you're pricing to hit a target margin, work backwards from the margin figure rather than adjusting the markup input by feel — small markup changes move margin by a smaller amount than they appear to.

Treat the output as a starting point for a pricing conversation, not a finished number. It only reflects the cost figure you enter, so it's only as accurate as that input — if unit cost excludes elements you actually incur, the true margin will be lower than shown.

Limitations and good practice

This tool works from a single unit cost and a single markup percentage, so it won't capture variation across a product range, seasonal cost changes, or costs that only show up at certain volumes. For a limited company selling multiple lines, it's worth running each line through separately rather than relying on an average, since averages can hide lines that are quietly priced below a sustainable margin.

It's also worth revisiting the calculation whenever input costs move, rather than treating a price list as fixed once set. Margin compression can happen gradually as costs creep up while prices stay still, and by the time it shows up in management accounts it may have been eroding profitability for some time. Pairing this converter with the gross margin & markup calculator gives a fuller picture of how pricing and cost of sales interact across a period rather than a single unit.