What Markup Gives a 12 Percent Margin?
Markup, against cost
13.6%
To keep 12 percent of the price, add 13.6 percent to a $10,000 cost: $11,363.64.
How that number is worked out
These are the figures this page was built with and every line the calculator produces from them. Change anything above and all of it moves.
- Your cost for the job10000 $
- I want to setMargin percent
- That number12 % or $
Price to charge$11,363.64
| Your cost | $10,000.00 |
|---|---|
| Price | $11,363.64 |
| Gross profit | $1,363.64 |
| Markup, against cost | 13.6% |
| Margin, against price | 12%this is the one your accountant means |
| If you want this margin | Mark up cost by | On $10,000 cost, charge |
|---|---|---|
| 10% | 11.1% | $11,111.11 |
| 15% | 17.6% | $11,764.71 |
| 20% | 25% | $12,500.00 |
| 25% | 33.3% | $13,333.33 |
| 30% | 42.9% | $14,285.71 |
| 35% | 53.8% | $15,384.62 |
| 40% | 66.7% | $16,666.67 |
| 50% | 100% | $20,000.00 |
Margin compared
Going the other way, the required markup climbs much faster than the margin does.
| Margin | Price to charge | Markup, against cost |
|---|---|---|
| 10% margin | $11,111.11 | 11.1% |
| 20% margin | $12,500.00 | 25% |
| 30% margin | $14,285.71 | 42.9% |
| 40% margin | $16,666.67 | 66.7% |
| 50% margin | $20,000.00 | 100% |
What else matters here
Twelve percent margin needs 13.6 percent added to cost. At a margin this thin the price is usually set by the market rather than by you, which leaves the buying side as the lever you actually control.
A three percent trade discount on $10,000 of cost is $300. Against $1,363.64 of gross profit that is twenty two percent more profit on the same job at the same price, won at the counter rather than in the negotiation. Account pricing, volume tiers, annual rebates, buying group membership and simply asking the branch manager for a better number are all worth more at a thin margin than at a fat one.
The other half of it is paying on time, because terms are priced. A supplier who never has to chase you gives a better number than one who does, and losing a discount by paying late is an expensive way to borrow money. Two percent ten net thirty, which is a common term, works out at an enormous annual rate if you skip the discount and take the extra twenty days.
What this calculator assumes
- Markup is measured against your cost. Margin is measured against the price. They are never the same number and confusing them is the most expensive arithmetic mistake in the trades.
- A 50 percent markup is a 33.3 percent margin. To actually keep 50 percent of the price you have to mark up by 100 percent.
Questions people ask
What markup gives a 12 percent margin?
13.6 percent. On a $10,000 cost that is a price of $11,363.64 and $1,363.64 of gross profit.
How much is a trade discount worth?
A great deal at a thin margin. Three percent off $10,000 of cost is $300, which is 22 percent more gross profit on the same job at the same price.
Does paying suppliers on time save money?
Yes, twice. Early payment discounts are real money, and a supplier who never has to chase you quotes better. Skipping a two percent discount to take an extra twenty days is expensive borrowing.
The markup vs margin calculator takes any dimensions you like and hands back the same list.