Markup vs margin: what you really keep
Markup is counted on your cost. What you keep is counted on your price. So a 50% markup does not leave you half: it leaves $33.33 of every $100 you charge.
Work out what you keep
Type what it costs you and what you charge for it. The answer shows here.
A price worked out here is rounded up to the cent, so what you keep is never short. Another calculator may show a cent less.
One sale, worked through
An example with made-up numbers, not a going rate
Say something costs you $100 and you sell it for $150. You added $50, which is half of your cost: a 50% markup. But the same $50 is only a third of the $150 you charged, so you keep $33.33 of every $100. To keep half, you would have to charge $200, which is your cost doubled.
Same dollars, two different sums
Markup
What you add, divided by what it costs you. In the example, $50 on a cost of $100: 50%.
Margin, or what you keep
The same dollars, divided by what you charge. In the example, $50 out of $150: $33.33 of every $100. By hand it is one division: what you add, divided by the price you end up with.
When you sell for more than it costs you, the price is the bigger number, so what you keep is always the smaller of the two. Mix the two up and you think you are keeping more than you are.
A table to keep
| A markup of | leaves you, of every $100 |
|---|---|
| 10% | $9.09 |
| 15% | $13.04 |
| 20% | $16.67 |
| 25% | $20 |
| 30% | $23.08 |
| 40% | $28.57 |
| 50% | $33.33 |
| 60% | $37.50 |
| 75% | $42.86 |
| 100% | $50 |
| 150% | $60 |
| 200% | $66.67 |
How much to mark up materials as a contractor
Start with what the material really costs you, not the price on the shelf. Add what you pay for delivery, what gets wasted or left over, and the trip to fetch it.
Then check your price against that cost with the calculator above. If you add a percent on top, pick the second choice in the calculator and see what it leaves you of every $100.
We do not say what markup is normal. TailGateBid has no figures of its own on what others charge, so the number has to come from your own costs.
A markup on materials is only part of a job. The price of a whole job has to cover your hours too, and what an hour really costs you is more than the wage.
Why this page can show a cent more than another
When this page works out a price from your cost, it rounds up to the next cent, never down. Rounded down, the price would leave you a hair less than it says.
A calculator that rounds to the nearest cent can show a cent less for the same sum. Neither is wrong. Ours is the one that never leaves you short.
The five prices under the calculator are rounded up as well: to the whole dollar, or to the cent when the amount is small.
In TailGateBid
TailGateBid is an app for trade businesses: quotes, scheduling and invoices from your phone. Inside it, what you keep always means a share of the price. No screen asks you for a markup.
A line on a quote can carry its cost beside its price. The quote then shows you the profit the job leaves and what share of the price that is, and your customer sees neither.
On the Rates page you type what you charge and, if you know it, what it costs you. When it suggests a price for a service, it rounds up the same way this page does.
Solo is $29 a month, and every plan starts with 30 days free.
Where each number comes from
- When this page works out a price for you, it never aims to leave you more than $90 of every $100. TailGateBid's own price suggestions stop at the same place. A price you type yourself can leave more.
- The ladder shows the prices that leave about $10, $20, $30, $40, $50 of every $100. The steps are our choice: a ladder to read across, not advice.
In TailGateBid a line on a quote can carry its cost beside its price, and only you see what you keep.
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Related
By TailGateBid. .
A calculator works from the numbers you type. Check the answer against your own books.