Markup vs. Margin: A Pricing Calculator for Your Clinic
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Markup and margin look like synonyms, but they are not, and the confusion costs money. Someone who applies a 40% markup thinking they will get a 40% margin ends up with a 28.6% margin. The calculator shows both sides of the math and translates one into the other.
Your data stays in your browser. The starting values are a hypothetical example.
What does each field mean?
| Field | What to enter |
|---|---|
| Procedure cost | The direct cost: product, disposables and time. |
| Markup applied on cost | The percentage you add to cost to reach the price. |
| Desired margin on price | The part of the price you want left over. |
How is it calculated?
- Price from markup = cost × (1 + markup).
- Resulting margin = (price minus cost) ÷ price.
- Markup needed = margin ÷ (1 minus margin).
- Price for the desired margin = cost ÷ (1 minus margin).
Worked hypothetical example
Hypothetical example: a cost of R$ 800.00, a 100% markup and a desired margin of 40%.
| Step | Calculation | Result |
|---|---|---|
| Price from markup | 800 × 2 | R$ 1,600.00 |
| Margin that price delivers | (1,600 minus 800) ÷ 1,600 | 50% |
| Markup for a 40% margin | 40 ÷ 60 | 66.7% |
| Price for a 40% margin | 800 ÷ 0.60 | R$ 1,333.33 |
How do I use the result?
With the starting price, check whether the procedure covers your clinical hour in the clinical hour value. For injectable products, use the price per ml and margin calculator. If the market does not accept the calculated price, the way forward is to cut cost or raise perceived value, not to accept a lower margin by accident; see pricing per ml.
Frequently asked questions
What is the difference between markup and margin?
Markup is the amount added on top of cost. Margin is the part of the price that is left after cost. A 100% markup gives a 50% margin.
Why doesn't a 100% markup give a 100% margin?
Because margin is calculated on the price, not on the cost. If the price is double the cost, profit is half of the price.
Which one should I use for pricing?
Both reach the same price if applied correctly. Margin is easier to compare with taxes and targets, because both are percentages of the price.