Multiplier vs gross profit vs markup percent

Three numbers describe the same price three different ways, and mixing them up is the most common pricing mistake in any shop. A "40% part" can mean two completely different sell prices depending on whether you mean 40% markup or 40% margin. Pista lets you enter your matrices in whichever style you think in, but you should understand all three so the math is never a surprise.

The three ways to say it

Take a part that cost you $100.

Markup percent

Markup is a percentage of your cost added on top.

• 40% markup means $100 + (40% of $100) = $140 sell price.
• Formula: sell = cost x (1 + markup).

Gross profit margin

Margin is your profit as a percentage of the sell price, not of cost.

• A $140 sell price on a $100 part is $40 profit on $140, which is a 28.6% margin.
• Formula: margin = (sell - cost) / sell.

Multiplier

The multiplier is the single number you multiply cost by to get sell. It is the fastest way to think and the hardest to fool.

• A 40% markup is a 1.40 multiplier ($100 x 1.40 = $140).
• Formula: sell = cost x multiplier.

Why people get burned

Markup and margin are never the same number, and the gap widens as the markup climbs.

Multiplier	Markup	Margin
1.25x	25%	20%
1.50x	50%	33%
2.00x	100%	50%
3.00x	200%	67%

If you want to keep 40% margin, you do not use a 40% markup. You need a 1.67 multiplier, which is a 67% markup. Set the wrong one and you leave roughly a quarter of your profit on the table.

Set your preferred style in Pista

1. Go to Settings then Pricing and Markups.
2. Open Display preference and choose how matrices show: Markup %, Margin %, or Multiplier.
3. Save. Pista converts between them on the fly, so you can type a markup and still read the resulting margin underneath.

Tip: Service writers think in markup; owners and accountants think in margin. Pick the Margin % display if you manage to a target gross profit number, because that is the number your Reports measure you against.

Good to know

• Whatever style you choose, the stored sell price is identical. The display setting only changes the label, not a customer's price.
• A quick gut check: to hit a target margin, the multiplier is 1 / (1 - margin). Want 50% margin? 1 / 0.5 = 2.0x.

Once these three click, every matrix in Pista reads the same way, and "40%" stops being ambiguous.