75% Margin to Markup: a 75% margin needs a 300% markup
If your target is a 75% margin, do not add 75% to cost. Add 300%. The difference between the two is the reason so many first price lists come in thinner than planned.
Price any cost at a 75% margin
Prefilled with this page's numbers. Change either field; results update instantly and nothing is sent anywhere.
The formula
75 ÷ 25 × 100 = 300%
price = cost ÷ (1 − 75/100) = cost ÷ 0.25
A 75% margin and a 300% markup are the same price. The margin figure is what appears on a profit and loss statement; the markup figure is what you type into a price list. Keep both in the spreadsheet and label them honestly.
Price table at 75% margin
Each price is the cost divided by 0.25. The markup column stays at 300% on every line; only the amounts scale.
| Cost | Price at 75% margin | Gross profit | Markup |
|---|---|---|---|
| $5.00 | $20.00 | $15.00 | 300% |
| $10.00 | $40.00 | $30.00 | 300% |
| $25.00 | $100.00 | $75.00 | 300% |
| $50.00 | $200.00 | $150.00 | 300% |
| $100.00 | $400.00 | $300.00 | 300% |
| $250.00 | $1,000.00 | $750.00 | 300% |
| $500.00 | $2,000.00 | $1,500.00 | 300% |
| $1,000.00 | $4,000.00 | $3,000.00 | 300% |
| $2,500.00 | $10,000.00 | $7,500.00 | 300% |
| $10,000.00 | $40,000.00 | $30,000.00 | 300% |
Margins near 75%
Between 65% and 85% margin the markup needed runs from 185.7% to 566.7%: it climbs faster than the margin because the cost share of the price keeps shrinking. The multiplier column turns a cost list into prices at that margin in one step.
Worked example
Numbers: cost $64.75, margin 75%, markup 300%, price $259.00, profit $194.25. The same $194.25 is a small share of $259.00 and a larger share of $64.75; that is the whole difference between the two percentages.
The margin-as-markup trap
At 75% margin the maximum discount before selling at cost is 75%. A promotion that takes 75% off a 75%-margin product sells exactly at cost, and any coupon on top loses money.
When a margin target is the right tool
Set prices from a margin target when the business is judged on gross margin: an online store, a wholesaler with published margin bands, or any company preparing accounts for a lender. A 75% margin target converts to a 300% markup for the person entering prices.
If a supplier quotes you a 75% markup, translate it before comparing: that is a 42.9% margin, 32.1 points below the 75% margin this page is about.
Mirror page: what margin a 75% markup produces.