140% Markup to Margin: a 140% markup is a 58.3% margin
At 140% markup the selling price is cost × (1 + 140/100), and the margin, the share of the price that is profit, is 58.3%. Everything below is derived from that one line.
Check any cost at 140% markup
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The formula
140 ÷ 240 × 100 = 58.3%
The reason 140% turns into 58.3% is the denominator. Profit stays the same, $123.20 on a $88.00 item, but markup measures it against the $88.00 you paid while margin measures it against the $211.20 the customer paid. A bigger denominator makes a smaller percentage.
Price table at 140% markup
Every row adds 140% to the cost. The margin column is the same on every line, 58.3%, because margin depends only on the percentage, not on the amount.
| Cost | Price at 140% markup | Gross profit | Margin |
|---|---|---|---|
| $5.00 | $12.00 | $7.00 | 58.3% |
| $10.00 | $24.00 | $14.00 | 58.3% |
| $25.00 | $60.00 | $35.00 | 58.3% |
| $50.00 | $120.00 | $70.00 | 58.3% |
| $100.00 | $240.00 | $140.00 | 58.3% |
| $250.00 | $600.00 | $350.00 | 58.3% |
| $500.00 | $1,200.00 | $700.00 | 58.3% |
| $1,000.00 | $2,400.00 | $1,400.00 | 58.3% |
| $2,500.00 | $6,000.00 | $3,500.00 | 58.3% |
| $10,000.00 | $24,000.00 | $14,000.00 | 58.3% |
Markups near 140%
From 130% to 150% markup the margin moves from 56.5% to 60%: 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 $88.00. Add 140%: $88.00 × 2.4 = $211.20. The gross profit is $211.20 − $88.00 = $123.20. As a share of cost that is 140% (the markup); as a share of price it is $123.20 ÷ $211.20 = 58.3% (the margin).
Why the two percentages differ
The expensive mistake is quoting 140% markup to someone who hears 140% margin. If a distributor asks for a "140% margin" and you give them 140% markup, they receive 58.3% and the relationship starts with a dispute over 81.7 points of margin per sale.
When to use markup, when to use margin
Use markup for the mechanics of pricing and margin for the decision. The mechanics: $88.00 × 2.4 = $211.20. The decision: does keeping 58.3% of $211.20 pay for everything that is not the product? If it does not, the markup is too low, whatever the competition charges.