How to Calculate Markup and Margin in Excel

Price a boutique’s products correctly by working out markup, pricing to a target markup, and pricing to a target margin.

You will learn to

• Calculate markup from cost and price
• Set a price from a target markup
• Set a price from a target margin

How it works

Markup and margin use the same profit but divide by different things. Markup = (price − cost) ÷ cost; margin = (price − cost) ÷ price. A $18.50 item sold for $42 has a 127% markup but a 56% margin.

To price from a target markup, multiply: cost × (1 + markup). To price from a target margin, divide: cost ÷ (1 − margin). Mixing the two up is one of the most common small-business pricing mistakes — a 50% markup is only a 33% margin.

=(B3-B2)/B2