Convert between margin and markup. Calculate selling price, profit per unit, and break-even.
Margin and markup both measure profit but against different bases. Margin is profit as a percentage of selling price: Margin % = (Selling price - Cost) / Selling price x 100. Markup is profit as a percentage of cost: Markup % = (Selling price - Cost) / Cost x 100. So the same rupee profit always shows a higher markup than margin, and the tool converts between the two and gives selling price and profit per unit.
You buy an item for ₹400 and sell it for ₹500. Profit per unit is ₹100, giving a markup of 25% (100/400) but a margin of 20% (100/500). To hit a 30% margin on the same ₹400 cost, you would price it at ₹571 (400 / (1 - 0.30)).
Markup is calculated on your cost price, margin on your selling price. A 50% markup equals only a 33.3% margin, so confusing the two makes your business look more profitable than it is.
Use Selling price = Cost / (1 - Margin%). For a ₹400 cost at 25% margin, price = 400 / 0.75 = ₹533.
Work out margin on the pre-GST (taxable) values, since GST is a pass-through you collect and remit. Mixing GST into cost or price distorts your true margin.
It varies widely: grocery and FMCG often run thin 3-15% margins, while apparel, footwear, and beauty can see 30-60%. Compare within your own category rather than across.
Commmerce handles price lists, quantity pricing, and customer group pricing. No spreadsheets.
See Inventory Management
