80% Margin to Markup: a 80% margin needs a 400% markup
At a 80% margin the price is cost ÷ (1 − 80/100), which is a 400% markup on cost. Everything on this page follows from that division.
Price any cost at a 80% margin
Prefilled with this page's numbers. Change either field; results update instantly and nothing is sent anywhere.
The formula
80 ÷ 20 × 100 = 400%
price = cost ÷ (1 − 80/100) = cost ÷ 0.2
A 80% margin and a 400% 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 80% margin
Each price is the cost divided by 0.2. The markup column stays at 400% on every line; only the amounts scale.
| Cost | Price at 80% margin | Gross profit | Markup |
|---|---|---|---|
| $5.00 | $25.00 | $20.00 | 400% |
| $10.00 | $50.00 | $40.00 | 400% |
| $25.00 | $125.00 | $100.00 | 400% |
| $50.00 | $250.00 | $200.00 | 400% |
| $100.00 | $500.00 | $400.00 | 400% |
| $250.00 | $1,250.00 | $1,000.00 | 400% |
| $500.00 | $2,500.00 | $2,000.00 | 400% |
| $1,000.00 | $5,000.00 | $4,000.00 | 400% |
| $2,500.00 | $12,500.00 | $10,000.00 | 400% |
| $10,000.00 | $50,000.00 | $40,000.00 | 400% |
Margins near 80%
Between 70% and 90% margin the markup needed runs from 233.3% to 900%: 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
Worked example. Cost $79.00, target margin 80%. Price = $79.00 ÷ (1 − 0.80) = $395.00. Profit = $395.00 − $79.00 = $316.00. Check: $316.00 ÷ $395.00 = 80% margin, and $316.00 ÷ $79.00 = 400% markup.
The margin-as-markup trap
Rounding hides the gap on small numbers and exposes it on large ones. On a $79.00 item the difference between a 80% markup and a 80% margin is $252.80 per unit; across a container of stock it is the whole profit.
When a margin target is the right tool
Use 80% margin as a floor, not a slogan. If overheads run at 10% of revenue, a 80% gross margin leaves the difference as operating profit; if they run at 80%, the business breaks even before tax.
For the mirror conversion, 400% markup back to margin, the answer is 80% again: 400 ÷ (100 + 400) = 80%. The two pages describe one price.
Mirror page: what margin a 80% markup produces.