Is a 50% markup the same as a 50% margin?

No. A 50% markup means price = 1.5 × cost. The same price, expressed as margin, is only 33%. Margin is always smaller than markup for any positive profit.

Which should I use when pricing?

Think in margin when you're setting prices, because customers see the price. Think in markup when you're calculating from cost, because suppliers and accountants quote markup.

How do I convert between them?

Margin = markup ÷ (1 + markup). Markup = margin ÷ (1 − margin). A 33% margin = 50% markup. A 50% margin = 100% markup.

Margin vs Markup: the difference (with examples)

Margin and markup look like the same number. They're not. Here's the difference in plain language, with the conversion table you'll bookmark.

The one-line definition

Margin is profit divided by selling price. Markup is profit divided by cost. Same profit, different denominator, different number.

An example you can hold in your head

You make a candle for $10 in materials and labor. You sell it for $15.

Profit = $15 − $10 = $5
Margin = $5 ÷ $15 = 33%
Markup = $5 ÷ $10 = 50%

The same candle, the same profit. A 50% markup. A 33% margin. Both are correct — and conflating them is the #1 pricing mistake we see small business owners make.

Why the difference matters

If your supplier says "we mark up 40%" and you assume that means a 40% margin, you'll set your prices too low. If your bookkeeper says "we ran a 30% margin last quarter," and you go raise prices by a 30% markup, you'll over-charge.

Conversion table

Markup	Margin	Cost → Price
20%	16.7%	$10 → $12.00
33%	24.8%	$10 → $13.30
50%	33.3%	$10 → $15.00
75%	42.9%	$10 → $17.50
100%	50.0%	$10 → $20.00
150%	60.0%	$10 → $25.00
200%	66.7%	$10 → $30.00

How to convert between them

Markup → Margin: margin = markup ÷ (1 + markup). A 50% markup → 0.5 ÷ 1.5 = 33%.

Margin → Markup: markup = margin ÷ (1 − margin). A 40% margin → 0.4 ÷ 0.6 = 67%.

Which should you use?

Think in margin when you're setting a price, because that's how the world thinks about your business: "what percent of revenue is profit?" Think in markup when you're costing up from a known input, because suppliers, wholesalers, and many manufacturers quote in markup.

What "good" looks like

Retail products: 20–40% margin (25–67% markup)
Handmade and luxury: 50%+ margin (100%+ markup)
Software / digital: 70–90% margin
Services: 30–60% margin

Below 20% margin and you have almost no room for discounts, returns, or growth. Plan accordingly.