What margin does a 30% markup produce?

23.1%. To convert a markup into the margin it delivers, divide the markup by 1 plus the markup: 0.30 ÷ 1.30 = 0.231. Going the other way, a target margin needs a markup of margin ÷ (1 − margin), so a 30% margin requires a 42.9% markup.

Is a 20% curation fee a 20% margin?

Only if the fee is calculated on the amount the advertiser pays. If it is taken on the media cost instead, it is a 20% markup and works out to a 16.7% margin. Deal memos are frequently ambiguous about which base a percentage applies to, and the difference is real money.

Why can margin never exceed 100%?

Because margin expresses profit as a share of revenue, and profit cannot be larger than the revenue it came from. A 100% margin would mean the media was free. Markup has no ceiling — buying at $1 and selling at $10 is a 900% markup but a 90% margin.

How much margin does a discount cost me?

More than the discount itself. On a 25% margin, a 10% discount does not remove a tenth of your profit — it removes 40% of it, because the discount comes entirely out of the margin rather than the media cost. The thinner the margin, the more damage a small concession does.

Margin Calculator

Fill in any two of cost, margin, revenue and profit and the other two are worked out. Enter a cost and a margin to price a buy, or a cost and a revenue to check one you have already agreed. Markup is shown alongside the margin deliberately: the same two numbers produce two different percentages, and quoting one when you meant the other is the most expensive arithmetic mistake in the business.

Currency

Media cost

What the inventory costs you.

Margin

Profit as a share of revenue.

Revenue

What the client pays you.

Profit

What you keep on the deal.

Markup on costRead-only

Profit as a share of cost — always the bigger number.

Fill in any two boxes and the other two are worked out. Cost and margin prices a buy; cost and revenue checks one you have already agreed.

Runs in your browser · nothing sent, stored, or logged

Formula

Margin % = ((Revenue − Cost) ÷ Revenue) × 100 · Markup % = ((Revenue − Cost) ÷ Cost) × 100

Identical numerator, different denominator. Margin divides profit by what the client pays; markup divides it by what you paid. Markup is always the larger figure, which is why it is the one people prefer to quote. Because the four quantities are bound by one identity, any two of them fix the other two — the calculator works in every direction rather than only from revenue and cost.

Which one your counterparty means

Rev-share and curation deals are almost always expressed as margin — a platform taking 15% means 15% of gross spend. Media buying and reselling conversations more often use markup, because it is quoted against the cost you just agreed. When a deal memo says a bare percentage with no base attached, assume nothing and ask: at a $100,000 media cost, the difference between a 20% margin and a 20% markup is $5,000, and it is always the same party who benefits from the ambiguity.

Margin stacking down the supply chain

In curation and resale, several parties each take a percentage of what remains after the last one. These do not add up — they compound, in the same way successive discounts do. A DSP fee, a curation fee and an SSP fee of 15%, 10% and 15% do not leave the publisher with 60% of gross; they leave roughly 65%, because each is applied to a progressively smaller base. Modelling a chain by adding the percentages will overstate the leakage, and modelling it the other way round will understate what you need to charge. Work through the layers one at a time.

Frequently asked questions

What margin does a 30% markup produce?: 23.1%. To convert a markup into the margin it delivers, divide the markup by 1 plus the markup: 0.30 ÷ 1.30 = 0.231. Going the other way, a target margin needs a markup of margin ÷ (1 − margin), so a 30% margin requires a 42.9% markup.
Is a 20% curation fee a 20% margin?: Only if the fee is calculated on the amount the advertiser pays. If it is taken on the media cost instead, it is a 20% markup and works out to a 16.7% margin. Deal memos are frequently ambiguous about which base a percentage applies to, and the difference is real money.
Why can margin never exceed 100%?: Because margin expresses profit as a share of revenue, and profit cannot be larger than the revenue it came from. A 100% margin would mean the media was free. Markup has no ceiling — buying at $1 and selling at $10 is a 900% markup but a 90% margin.
How much margin does a discount cost me?: More than the discount itself. On a 25% margin, a 10% discount does not remove a tenth of your profit — it removes 40% of it, because the discount comes entirely out of the margin rather than the media cost. The thinner the margin, the more damage a small concession does.