Margin vs markup: how to price your products so you actually make money

Pricing feels like guesswork for a lot of owners. But two simple ideas — margin and markup — turn it into something you can control.

Markup: how much you add on top of cost

Markup is the percentage you add to what an item cost you. If a dress costs you Rs 650 and you sell it for Rs 1,000, your markup is Rs 350 on Rs 650 — about 54%.

Margin: how much of the sale is profit

Margin looks at the same Rs 350 profit but as a share of the selling price. Rs 350 on a Rs 1,000 sale is a 35% margin. Margin is the number that tells you how healthy each sale really is.

Same item, same Rs 350 profit — but 54% markup and 35% margin. They describe the same sale from two angles. Mixing them up is where pricing mistakes start.

Why it matters for your cash

• Margin tells you how much of every rupee of sales you keep.
• If your margin is thin, a small discount can wipe out your profit entirely.
• Knowing your margin per product shows you which lines are really worth stocking.

A simple habit

For each product, write down what it costs you and what you sell it for, and glance at the margin. Do it once and slow-moving, low-margin items jump out — and so do your quiet winners. Our free margin calculator does the maths for you.

Frequently asked questions

Is a 35% margin good?

It depends on your costs and category. The point isn't a magic number — it's knowing your margin per product so discounts and slow lines don't quietly eat your profit.

Where can I calculate this?

Use our free margin calculator on the Tools page — enter cost and price and it shows profit, margin and markup instantly.