Quick answer: To achieve a 30% gross margin on a sale with positive cost, the required markup on cost is approximately 42.86%. A 30% markup does not produce a 30% margin.
Check your own price: Profit Margin Calculator shows gross profit, margin and markup side by side.
Why the numbers are different
A gross margin of 30% means profit equals 30% of the selling price. Markup measures the same profit against the cost. The denominators are different, so the percentages differ.
Calculate the required markup
Use markup = target margin ÷ (1 − target margin), with both percentages expressed as decimals. For 30%, the calculation is 0.30 ÷ 0.70 = 0.428571…, or approximately 42.86%.
Examples at different costs
| Direct cost | Price for 30% margin | Gross profit | Markup on cost |
|---|---|---|---|
| $35 | $50 | $15 | 42.86% |
| $70 | $100 | $30 | 42.86% |
| $140 | $200 | $60 | 42.86% |
Regardless of the cost, the percentage relationship is the same for a 30% margin. Amounts in the table are example figures, not suggested prices.
The most common mistake
Suppose your cost is $70. A 30% markup adds $21, producing a $91 price. The margin is $21 ÷ $91 × 100 ≈ 23.08%. A price of $100 is required for the intended 30% margin.
Check the displayed selling price
If rounding changes the price, recalculate the actual margin from that rounded number. A target might be 30.00%, but the achieved figure can be slightly different after rounding to cents or applying other pricing decisions.
What this example doesn't decide
The mathematical target does not tell a business whether a price is commercially appropriate. Expenses outside the stated cost, market conditions and other factors may matter. BuzBolt provides general calculations, not professional pricing or accounting advice.
Related guides
For a general formula, read selling price from target margin. For conversion between a range of rates, use the markup-to-margin chart.
BuzBolt provides general educational tools and explanations. Check your inputs and confirm any legal, tax, accounting or workplace-specific requirements independently where relevant.