180% Markup to Margin: a 180% markup is a 64.3% margin
Marking a product up by 180% gives you a 64.3% margin, not a 180% margin. This page shows the arithmetic, a price table at 180% markup, and what the same product would need to carry a true 180% margin.
Check any cost at 180% markup
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The formula
180 ÷ 280 × 100 = 64.3%
A 180% markup can never be a 180% margin because you would need the profit to equal 180% of a price that already contains the profit. On a $240.00 cost the price is $672.00; the $432.00 of profit is 64.3% of that, and no amount of rounding closes the gap.
Price table at 180% markup
Every row adds 180% to the cost. The margin column is the same on every line, 64.3%, because margin depends only on the percentage, not on the amount.
| Cost | Price at 180% markup | Gross profit | Margin |
|---|---|---|---|
| $5.00 | $14.00 | $9.00 | 64.3% |
| $10.00 | $28.00 | $18.00 | 64.3% |
| $25.00 | $70.00 | $45.00 | 64.3% |
| $50.00 | $140.00 | $90.00 | 64.3% |
| $100.00 | $280.00 | $180.00 | 64.3% |
| $250.00 | $700.00 | $450.00 | 64.3% |
| $500.00 | $1,400.00 | $900.00 | 64.3% |
| $1,000.00 | $2,800.00 | $1,800.00 | 64.3% |
| $2,500.00 | $7,000.00 | $4,500.00 | 64.3% |
| $10,000.00 | $28,000.00 | $18,000.00 | 64.3% |
Markups near 180%
From 170% to 190% markup the margin moves from 63% to 65.5%: 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 $240.00 item. At 180% markup the ticket price is $672.00, which leaves $432.00 after paying for the item. That $432.00 is 180% of what you paid but 64.3% 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 180% on every line, while the real margin sits at 64.3%. Multiply that by a year of sales and the profit forecast is out by the same 115.7 points.
When to use markup, when to use margin
Use markup for the mechanics of pricing and margin for the decision. The mechanics: $240.00 × 2.8 = $672.00. The decision: does keeping 64.3% of $672.00 pay for everything that is not the product? If it does not, the markup is too low, whatever the competition charges.