What markup is
Markup is the amount added to cost to reach the selling price, as a percentage of cost. A $40 item with a 50% markup sells for $60.
Converting markup to margin
Margin = Markup ÷ (1 + Markup). A 50% markup equals a 33.3% margin. The calculator shows both so you can price consistently and compare to competitors quoted either way.
Cost-plus pricing
Markup is the basis of cost-plus pricing — simple, but it ignores willingness to pay. Use it as a floor, then test what the market will bear.