Margin ↔ markup
| Margin | Markup | Multiplier |
|---|---|---|
| 10% | 11.1% | 1.111× |
| 15% | 17.6% | 1.176× |
| 20% | 25% | 1.250× |
| 25% | 33.3% | 1.333× |
| 30% | 42.9% | 1.429× |
| 33.3% | 50% | 1.500× |
| 40% | 66.7% | 1.667× |
| 50% | 100% | 2.000× |
| 60% | 150% | 2.500× |
| 66.7% | 200% | 3.000× |
| 75% | 300% | 4.000× |
Markup equals margin divided by one minus the margin. A 50% margin is a 100% markup; a 33.3% margin is a 50% markup; a 20% margin is a 25% markup. The two only coincide at zero.
How to convert margin and markup
The multiplier column is the practical output. Rather than converting percentages every time, a shop that wants a consistent 40% margin can simply multiply every ex-VAT cost by 1.667 and be done. That single number is easy to apply, easy to check, and does not invite the margin-markup confusion at all. It also makes a price list trivially auditable; every line should be cost times the same figure, and anything that is not stands out.
Questions
Divide the margin by one minus the margin. A 0.4 margin gives 0.4 ÷ 0.6 = 66.7% markup.
Divide the markup by one plus the markup. A 1.0 markup gives 1 ÷ 2 = 50% margin.
Markup, for any positive profit, because it divides by the smaller number.
Two. Double the cost; the retail "keystone" price.
No. Margin is bounded by 100% because profit cannot exceed revenue. Markup has no upper bound.