Markup or Margin? Shop Profit Percentages Explained With a Table
Why a 25% markup is only a 20% margin, a table from 10% to 100% markup, and the price to charge for the margin you want.
By the TurantTools PK team · Updated 28 October 2026 · 2 min read
In a shop, "20% profit" can mean two things: adding 20% to the cost (markup), or keeping 20% of the selling price as profit (margin). They're not the same, and the gap changes your sums over a year.
An item bought for Rs 800
| Markup (on cost) | Selling price | Profit | Margin (on selling price) |
|---|---|---|---|
| 10% | Rs 880 | Rs 80 | 9.1% |
| 20% | Rs 960 | Rs 160 | 16.7% |
| 25% | Rs 1,000 | Rs 200 | 20% |
| 33.3% | Rs 1,067 | Rs 267 | 25% |
| 50% | Rs 1,200 | Rs 400 | 33.3% |
| 100% | Rs 1,600 | Rs 800 | 50% |
A 25% markup gives only a 20% margin, and a 100% markup (double the price) gives 50%.
The other way round: the price for the margin you want
| Margin you want | Markup to add | Price for a Rs 800 item |
|---|---|---|
| 10% | 11.1% | Rs 889 |
| 20% | 25% | Rs 1,000 |
| 30% | 42.9% | Rs 1,143 |
For shopkeepers
- Discounts always come off the selling price, so think in margin.
- Rent, electricity and wages come out of profit; your margin needs to cover them all.
- If the price includes sales tax, work out the margin without the tax.