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Reverse Margin Calculator

📅Last updated: December 14, 2025
✓Reviewed by: LumoCalculator Team

Calculate cost from selling price, determine selling price from cost, or convert between margin and markup percentages. Essential for pricing strategy and profit analysis.

Reverse Margin Calculator

Calculate cost, price, or margin

Margin = Profit / Selling Price

Calculation Results

Calculated Cost
$60.00
Cost
$60.00
Profit
$40.00
Price
$100.00
Margin
40.00%
Profit ÷ Price
Markup
66.67%
Profit ÷ Cost
Price Composition
60%
40%
CostProfit
💡 Summary

With a selling price of $100.00 and a 40.0% margin, your cost must be $60.00. This leaves $40.00 profit per unit (66.7% markup on cost).

Formula & Calculation

Cost = Price × (1 - Margin%)
Cost = 100.00 × (1 - 0.4) = 60.00

Multipliers

Margin Multiplier×1.6667
Markup Multiplier×1.6667

Margin multiplier: Cost × 1.67 = Price
Markup multiplier: Cost × 1.67 = Price

Related Calculators

Margin vs Markup Conversion Table

Margin %Markup %Multiplier
10.00%11.11%×1.111
15.00%17.65%×1.176
20.00%25.00%×1.250
25.00%33.33%×1.333
30.00%42.86%×1.429
33.33%50.00%×1.500
40.00%66.67%×1.667
50.00%100.00%×2.000
60.00%150.00%×2.500
75.00%300.00%×4.000

Key Concepts

📊 Margin
Margin = Profit / Price × 100
  • • Percentage of price that is profit
  • • Always less than 100%
  • • Used in financial reporting
📈 Markup
Markup = Profit / Cost × 100
  • • Percentage added to cost
  • • Can exceed 100%
  • • Used in retail pricing
💵 Gross Profit
Profit = Price - Cost
  • • Dollar amount earned per sale
  • • Before operating expenses
  • • Same number, different percentages
🔄 Conversion
Margin = Markup / (100 + Markup)
  • • 50% markup = 33.3% margin
  • • 100% markup = 50% margin
  • • Same profit, different bases

Industry Margin Benchmarks

IndustryTypical MarginTypical Markup
Grocery/Supermarket1-3%1-3%
Restaurants3-9%3-10%
Retail Clothing4-13%4-15%
Electronics Retail1-5%1-5%
Jewelry42-47%72-90%
Software/SaaS70-90%233-900%
Furniture40-50%67-100%
Pharmaceuticals10-20%11-25%

* These are typical gross margins. Net margins (after all expenses) are lower.

Quick Reference Formulas

Cost from Price
Cost = Price × (1 - Margin%)
Cost = Price / (1 + Markup%)
Price from Cost
Price = Cost / (1 - Margin%)
Price = Cost × (1 + Markup%)
Margin from Prices
Margin% = (Price - Cost) / Price
Markup from Prices
Markup% = (Price - Cost) / Cost

Common Mistakes to Avoid

❌ Confusing Margin and Markup

A 50% markup is NOT the same as a 50% margin. 50% markup = 33.3% margin. Always clarify which one you're discussing.

❌ Adding Margin to Cost

Don't add margin percentage directly to cost. A $100 cost with 40% margin is NOT $140. Use: Price = Cost / (1 - 0.40) = $166.67.

❌ Ignoring All Costs

Remember "cost" should include product cost, shipping, packaging, and any variable costs directly tied to the sale.

Frequently Asked Questions

What is the difference between margin and markup?
Margin is profit as a percentage of the selling price: (Price - Cost) / Price. Markup is profit as a percentage of the cost: (Price - Cost) / Cost. The same profit can have very different margin and markup percentages. For example, a $60 item sold for $100 has a 40% margin but 66.67% markup.
How do I calculate cost from selling price and margin?
Use the formula: Cost = Selling Price × (1 - Margin%). For example, if the selling price is $100 and margin is 40%, then Cost = $100 × (1 - 0.40) = $100 × 0.60 = $60.
How do I convert markup to margin?
Use the formula: Margin% = Markup% / (100 + Markup%). For example, a 50% markup equals 50 / (100 + 50) × 100 = 33.33% margin. Conversely, Markup% = Margin% / (100 - Margin%).
How do I calculate selling price from cost and margin?
Use the formula: Selling Price = Cost / (1 - Margin%). For example, if cost is $60 and you want 40% margin, then Price = $60 / (1 - 0.40) = $60 / 0.60 = $100.
Why is margin always lower than markup?
Margin divides profit by the larger number (selling price), while markup divides by the smaller number (cost). Since the selling price is always greater than cost (for positive profit), the same profit yields a lower margin percentage than markup percentage.
What is a good profit margin?
Healthy margins vary by industry: Grocery stores operate on 1-3% margins, restaurants 3-9%, retail clothing 4-13%, and software/SaaS companies 70-90%. Consider your industry benchmarks, operating costs, and competitive positioning when setting target margins.