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Margin or markup — they are not the same.
Cost and price in, margin and markup out. Not the same number.
Result
- Profit
- €0.00
- Margin
- —
- Markup
- —
Margin and markup are not the same number. Margin is profit over the price, markup is profit over the cost — a 50% markup is a 33% margin, which is how a business talks itself into pricing too low.
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The difference that costs money
Margin is profit as a share of the price. Markup is profit as a share of the cost. A 50% markup is a 33% margin; a 50% margin needs a 100% markup. Quote a "50% margin" while pricing at a 50% markup and you have given away a third of your profit without noticing.
Pricing to a target
If you need 40% margin on a €600 cost, the price is not €840 — that is a 40% markup and a 28.6% margin. It is €1,000. The target modes do that division for you, which is the calculation worth getting right before you send the quote.
What to put in the cost
Everything the job consumes, not just materials. Subcontractors, software you only bought for this client, travel, and your own hours at a rate you would actually accept. A margin calculated on an understated cost is a number that makes you feel better and nothing else.
Questions, answered
Is it free?
Yes. No account, nothing stored.
Which should I quote in?
Margin, usually — it is the share of revenue you keep, so it compares across jobs. Retail often talks in markup.
Should I use net or gross figures?
Net. VAT is not yours, so including it inflates both numbers.
Can I put this in a quote?
Use the quote generator — it takes the price you land on here.
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