10% Markup to Margin: a 10% markup is a 9.1% margin
Cost times 1.1 is a 10% markup, and on that price the gross margin works out to 9.1%. Use the calculator below to check any cost, or read the table for the usual price points.
Check any cost at 10% markup
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The formula
10 ÷ 110 × 100 = 9.1%
Here is the whole relationship in one sentence: margin = markup ÷ (100 + markup). Put 10 in and you get 9.1. Put the margin back through markup = margin ÷ (100 − margin) and you return to 10. The two figures are locked together; only the label changes.
Price table at 10% markup
Every row adds 10% to the cost. The margin column is the same on every line, 9.1%, because margin depends only on the percentage, not on the amount.
| Cost | Price at 10% markup | Gross profit | Margin |
|---|---|---|---|
| $5.00 | $5.50 | $0.50 | 9.1% |
| $10.00 | $11.00 | $1.00 | 9.1% |
| $25.00 | $27.50 | $2.50 | 9.1% |
| $50.00 | $55.00 | $5.00 | 9.1% |
| $100.00 | $110.00 | $10.00 | 9.1% |
| $250.00 | $275.00 | $25.00 | 9.1% |
| $500.00 | $550.00 | $50.00 | 9.1% |
| $1,000.00 | $1,100.00 | $100.00 | 9.1% |
| $2,500.00 | $2,750.00 | $250.00 | 9.1% |
| $10,000.00 | $11,000.00 | $1,000.00 | 9.1% |
Markups near 10%
From 1% to 19% markup the margin moves from 1% to 16%: each two-point step in markup is worth less than two points of margin at this level, and the gap widens as the markup grows. The multiplier column is what you type into a spreadsheet to price a cost list.
Worked example
Take a $18.00 item. At 10% markup the ticket price is $19.80, which leaves $1.80 after paying for the item. That $1.80 is 10% of what you paid but 9.1% of what you charged, and only the second number tells you how much of the sale is yours to spend on overheads.
Why the two percentages differ
Spreadsheets make this worse, not better. A column labelled "margin" that actually divides profit by cost will report 10% on every line, while the real margin sits at 9.1%. Multiply that by a year of sales and the profit forecast is out by the same 0.9 points.
When to use markup, when to use margin
A 10% markup is typical for categories where the seller adds little beyond stocking and handling: it leaves 9.1% of each sale to cover overheads. Categories with high service content usually need a higher markup to reach a margin that pays for the time involved.
Do not confuse this with the 10% margin page. To keep 10% of the price you need a 11.1% markup; the 10% markup on this page keeps only 9.1%.
See the mirror page: what markup gives a 10% margin.