Bidcore | Free tools | Pricing

Margin vs markup calculator

Enter your cost and any one of margin, markup or price. The other two update as you type, and the formulas are shown so you can check them.

Common questions

What is the difference between margin and markup?

Both describe profit. Margin is profit as a share of the price you charge. Markup is profit as a share of what the job costs you. The same job has a different number for each: a job that costs $650 and sells for $1,000 has a 35% margin and a 53.8% markup.

Why does a 35% markup not give me a 35% margin?

Because they are measured against different bases. A 35% markup on $650 sells for $877.50, which leaves $227.50 of profit. That is 25.9% of the price, so it is a 25.9% margin. To keep a 35% margin you need a 53.8% markup.

Which should I use to price a bid?

Either works if you use it the same way every time. Margin is easier to compare to your overhead and to what you need the business to keep, because it is a share of the money that comes in. Bidcore prices with margin: price = cost / (1 - margin).

What should be included in cost?

Everything it takes to do the job: material, labor, trucking, equipment, subcontractors and any extras. Decide whether your overhead is in the cost or added as its own line, and do it the same way on every bid.

Can margin be 100%?

No. A 100% margin would mean the price is infinite for any cost above zero. Margin is always below 100%, while markup can be any number above zero.

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