The formulas
Markup % = (price − cost) ÷ cost × 100
Margin % = (price − cost) ÷ price × 100
Price from a markup = cost × (1 + markup)
Price from a margin = cost ÷ (1 − margin)
The confusion is expensive in one direction: a shopkeeper who wants a 20% margin and adds 20% to cost gets a 16.67% margin instead. Work both on prices before tax; GST goes on top (or, for MRP goods, is already inside the price — see tax-inclusive price).
Conversion table
| Markup | Equals a margin of |
|---|---|
| 10% | 9.09% |
| 20% | 16.67% |
| 25% | 20% |
| 50% | 33.33% |
| 100% | 50% |
Example
An item costs ₹80 before tax. For a 20% margin, price it at ₹80 ÷ 0.8 = ₹100. Adding a 20% markup instead gives ₹80 × 1.2 = ₹96 — which is a 16.67% margin.
How Nivasik handles it
- An item can be priced from what you paid: at its MRP, as "a percentage on what it cost" — a markup, so ₹80 plus 20% is ₹96 — or as "a fixed amount on what it cost". The buying price is always before tax, and the tax goes on top.
- Each delivery lot keeps its own cost, so with a fixed ₹15 on cost the box bought at ₹80 sells at ₹95 while the box bought at ₹82 sells at ₹97.
- Every sale keeps the lot and its cost, which is what makes the margin report real rather than estimated.