How it works
Margin is the share of the selling price you keep: profit divided by price. Markup is how much you add on top of your cost: profit divided by cost. They describe the same sale from two sides, which is why a 50% markup is only a 33.33% margin.
Suppliers and accountants usually talk in margin; shop owners often price with a markup ("cost plus half"). Use the mode that matches what you know. If you set a target margin, the calculator gives the price as cost divided by (1 minus the margin).
Use the same currency for cost and price. If you buy in dollars and sell in lira, convert first with the USD and LBP converter at the rate you actually use.
Worked example
A juice bar pays 6 USD in fruit, cup and straw for a large cocktail and sells it for 10 USD. Profit is 4 USD. Margin is 4 divided by 10, so 40%. Markup is 4 divided by 6, so 66.67%.
Now reverse it: to keep a 40% margin on something that costs 6 USD, the price is 6 divided by 0.6, which is 10 USD. Pick "Cost and target margin", type 6 and 40, and the calculator shows the same 10 USD.
Questions and answers
What is the difference between margin and markup?
Margin is profit as a share of the selling price. Markup is profit as a share of the cost. On a 6 USD cost sold at 10 USD, the margin is 40% and the markup is 66.67%. Quoting one when you mean the other is the most common pricing mistake.
Should I include VAT in the price?
Calculate margin on the price before VAT, because VAT is collected for the state and is not yours to keep. If you are VAT registered, find the price before VAT with the VAT calculator first.
Does it work in Lebanese lira?
Yes. Pick LBP and results are shown in whole lira without decimals. The percentages are the same in both currencies, as long as cost and price are in the same one.
What should my cost include?
Everything that goes into one item: the product or ingredients, packaging, and delivery per unit if you pay it. Rent and salaries are fixed costs: see how many sales cover them with the break-even calculator.