Margin Calculator
Enter what the client pays and what the media costs to get margin, markup and profit together. They are shown side by side 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.
Margin
—
Profit ÷ revenue
Markup
—
Profit ÷ cost
Profit
$—
Revenue − cost
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Formula
Margin % = ((Revenue − Cost) ÷ Revenue) × 100 · Markup % = ((Revenue − Cost) ÷ Cost) × 100Identical 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.
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.