100% Markup to Margin: a 100% markup is a 50% margin
If you add 100% to your cost, you are keeping 50% of every sale as gross profit. That gap between 100 and 50 is the single most common pricing mistake we see in small-business spreadsheets.
Check any cost at 100% markup
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The formula
100 ÷ 200 × 100 = 50%
A 100% markup can never be a 100% margin because you would need the profit to equal 100% of a price that already contains the profit. On a $42.00 cost the price is $84.00; the $42.00 of profit is 50% of that, and no amount of rounding closes the gap.
Price table at 100% markup
Every row adds 100% to the cost. The margin column is the same on every line, 50%, because margin depends only on the percentage, not on the amount.
| Cost | Price at 100% markup | Gross profit | Margin |
|---|---|---|---|
| $5.00 | $10.00 | $5.00 | 50% |
| $10.00 | $20.00 | $10.00 | 50% |
| $25.00 | $50.00 | $25.00 | 50% |
| $50.00 | $100.00 | $50.00 | 50% |
| $100.00 | $200.00 | $100.00 | 50% |
| $250.00 | $500.00 | $250.00 | 50% |
| $500.00 | $1,000.00 | $500.00 | 50% |
| $1,000.00 | $2,000.00 | $1,000.00 | 50% |
| $2,500.00 | $5,000.00 | $2,500.00 | 50% |
| $10,000.00 | $20,000.00 | $10,000.00 | 50% |
Markups near 100%
From 90% to 110% markup the margin moves from 47.4% to 52.4%: 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
Worked example. A product costs $42.00. Add 100%: $42.00 × 2 = $84.00. The gross profit is $84.00 − $42.00 = $42.00. As a share of cost that is 100% (the markup); as a share of price it is $42.00 ÷ $84.00 = 50% (the margin).
Why the two percentages differ
When you compare suppliers, make sure both quote the same measure. One quoting 100% markup and another quoting 50% margin are offering the identical deal; one quoting 100% margin is offering a much richer one.
When to use markup, when to use margin
A 100% markup is typical for categories where the seller adds little beyond stocking and handling: it leaves 50% 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.