Why is markup always higher than profit margin?

Markup is calculated using the cost of the item as the base (a smaller number), while margin is calculated using the selling price as the base (a larger number). Profit divided by cost yields a higher percentage than profit divided by price.

How do you calculate selling price from a target margin?

To calculate the required selling price to hit a target margin, use the formula: Price = Cost / (1 - Target Margin %). E.g. cost is $70 and target is 30% margin: 70 / 0.70 = $100.

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