Markup Calculator
Your cost to acquire or produce
Price you charge customers
Markup Calculation Results
Markup Amount = Cost Price × (Markup % ÷ 100)
Selling Price = Cost Price + Markup Amount
Enter cost and markup to calculate selling price
Results will appear here instantly
Common Markup Calculations
How the Markup Calculator Works
Markup is the percentage added to the cost price of goods to determine the selling price. It’s one of the most fundamental pricing strategies used by retailers, wholesalers, manufacturers, and service providers worldwide. Understanding markup helps ensure you price products profitably while remaining competitive.
This markup calculator eliminates pricing guesswork. Whether you need to calculate selling price from cost and markup percentage, or find the markup percentage from cost and selling price, this tool provides instant, accurate results with clear visual breakdowns.
Formula: Markup Amount = Cost Price × (Markup Percentage ÷ 100). Selling Price = Cost Price + Markup Amount. To find markup percentage from cost and selling price: Markup % = ((Selling Price – Cost Price) ÷ Cost Price) × 100.
Understanding Markup vs. Margin
Many business owners confuse markup with profit margin, but they’re calculated differently and serve different purposes:
| Aspect | Markup | Profit Margin |
|---|---|---|
| Calculation Base | Based on cost price | Based on selling price |
| Formula | (Selling Price – Cost) ÷ Cost | (Selling Price – Cost) ÷ Selling Price |
| Purpose | Setting prices from costs | Measuring profitability |
| Example: Cost $60, Sell $100 | 67% markup ($40 ÷ $60) | 40% margin ($40 ÷ $100) |
| Relationship | Markup percentage is always higher | Margin percentage is always lower |
This calculator shows both markup and margin percentages so you can understand both perspectives. Use markup to set prices, use margin to analyze profitability.
Common Markup Percentages by Industry
Markup percentages vary significantly across industries based on factors like competition, volume, and operating costs:
| Industry | Typical Markup | Equivalent Margin | Notes |
|---|---|---|---|
| Grocery/Retail | 15-30% | 13-23% | High volume, low margin |
| Restaurants | 300-600% | 75-86% | High labor and overhead costs |
| Jewelry | 100-400% | 50-80% | Low volume, high perceived value |
| Electronics | 10-30% | 9-23% | Competitive, price-sensitive |
| Clothing/Apparel | 100-300% | 50-75% | Seasonal, fashion-driven |
| Construction Materials | 20-50% | 17-33% | Project-based, bulk pricing |
| Luxury Goods | 200-1000%+ | 67-91%+ | Brand-driven, exclusive |
When to Use This Markup Calculator
Retail Business Owners: Calculate selling prices for new inventory. If you buy widgets for $15 each and want a 60% markup, you should sell them for $24. This calculator shows you’ll make $9 profit per widget with a 37.5% profit margin.
Wholesalers and Distributors: Set prices for business customers. If your cost is $80 per case and you apply a 25% markup, sell for $100 per case. You earn $20 profit with a 20% margin on each sale.
Manufacturers: Price finished goods based on production costs. If it costs $45 to manufacture a product and you need a 100% markup to cover overhead and profit, sell for $90. You’ll have a 50% profit margin.
Service Providers: Calculate hourly rates or project prices. If your time costs $50/hour (salary + benefits) and you want 100% markup to cover overhead and profit, charge $100/hour. You’ll have a 50% margin on your time.
Important: Markup should cover not just profit but also operating expenses (rent, utilities, marketing, salaries). Many businesses fail because they only mark up for profit without accounting for overhead. This calculator helps you see the relationship between markup and actual profit margin.
Common Markup Calculation Scenarios
Scenario 1: You buy imported goods for $25 each. After shipping and duties, your landed cost is $30. You want a 67% markup to cover expenses and profit. Selling price = $30 + ($30 × 0.67) = $50.10. Your profit is $20.10 per item with a 40% profit margin.
Scenario 2: A bakery makes cakes that cost $8 in ingredients. With labor and overhead, total cost is $12. They use a 150% markup for specialty items. Selling price = $12 + ($12 × 1.5) = $30. Profit = $18 per cake with a 60% margin.
Scenario 3: Electronics retailer buys headphones for $75. Market research shows competitors sell similar models for $120. Markup = (($120 – $75) ÷ $75) × 100 = 60%. Profit margin = ($45 ÷ $120) × 100 = 37.5%.
Scenario 4: Consultant has an effective hourly cost of $80 (including benefits, taxes, office costs). She wants a 125% markup to cover business development and profit. Hourly rate = $80 + ($80 × 1.25) = $180. Margin = ($100 ÷ $180) × 100 = 55.6%.
Keystone Markup: The 100% Standard
Keystone markup refers to doubling the cost price (100% markup). If an item costs $50, keystone pricing means selling it for $100. This results in a 50% profit margin (($100 – $50) ÷ $100 = 0.50).
Keystone markup was once standard in retail but has become less common due to increased competition and price transparency. However, it’s still used for certain product categories:
| Product Category | Keystone (100%) | Selling Price | Profit Margin |
|---|---|---|---|
| $20 cost item | 100% markup | $40 | 50% |
| $50 cost item | 100% markup | $100 | 50% |
| $100 cost item | 100% markup | $200 | 50% |
This calculator includes a 100% markup button for quick keystone pricing calculations. Remember that 100% markup equals 50% profit margin.
Frequently Asked Questions
What’s the difference between markup and profit margin?
Markup is calculated as a percentage of cost: (Selling Price – Cost) ÷ Cost. Margin is calculated as a percentage of selling price: (Selling Price – Cost) ÷ Selling Price. A 50% markup equals a 33% margin. A 100% markup equals a 50% margin.
How do I convert markup to margin?
Margin = Markup ÷ (1 + Markup). Example: 50% markup = 0.50 ÷ (1 + 0.50) = 0.333 = 33.3% margin. 100% markup = 1.00 ÷ (1 + 1.00) = 0.50 = 50% margin. This calculator does the conversion automatically.
What’s a good markup percentage?
It depends on your industry, overhead costs, and competition. Retail typically uses 15-50% markup. Restaurants use 300-600%. Luxury goods use 200-1000%+. Consider your costs, market prices, and desired profit when setting markup.
Should I use the same markup for all products?
No, different products often have different markups based on demand, competition, turnover rate, and handling costs. High-volume, competitive items might have lower markups. Specialty or exclusive items can have higher markups.
How do I account for discounts in markup calculations?
Calculate markup based on your regular selling price, not discounted price. If you regularly discount, build that into your initial markup. For example, if you plan 20% off sales, increase your markup so the sale price still yields acceptable profit.
What costs should be included in “cost price”?
Include all direct costs: purchase price, shipping, duties, taxes, and any direct handling costs. For manufactured goods, include raw materials and direct labor. Don’t include indirect overhead (rent, utilities, marketing) in cost price for markup calculations.
Common Mistakes to Avoid
Mistake 1: Confusing markup with margin. Setting a 50% markup thinking it’s a 50% margin actually gives you only a 33% margin. Use this calculator to see both percentages clearly.
Mistake 2: Using the same markup for all products without considering market prices. Check what customers will pay, not just what markup you want.
Mistake 3: Not including all costs in your cost price. Forgetting shipping, taxes, or handling costs makes your markup calculations inaccurate and can lead to losses.
Mistake 4: Setting markup too low to cover overhead. Markup needs to cover not just profit but also rent, utilities, salaries, and other operating expenses.
Mistake 5: Ignoring competitor pricing. If competitors sell similar items for less with reasonable quality, your high markup may prevent sales regardless of your costs.
Table of Common Markup Calculations
| Cost Price | 25% Markup | 50% Markup | 100% Markup | 200% Markup |
|---|---|---|---|---|
| $10.00 | $12.50 | $15.00 | $20.00 | $30.00 |
| $25.00 | $31.25 | $37.50 | $50.00 | $75.00 |
| $50.00 | $62.50 | $75.00 | $100.00 | $150.00 |
| $100.00 | $125.00 | $150.00 | $200.00 | $300.00 |
| $200.00 | $250.00 | $300.00 | $400.00 | $600.00 |
Advanced Markup Strategies
Tiered Markup: Apply different markups based on quantity or customer type. Wholesale customers get 25% markup, retail gets 50%. Or: First 100 units at 40% markup, additional units at 30%.
Competitive Markup: Research competitor prices and set markup to match or slightly undercut them, assuming your costs allow it. This calculator helps you determine if competitive pricing is feasible given your costs.
Psychological Pricing: Set prices that “feel” right to customers ($9.99 instead of $10.00, $97 instead of $100). Calculate the markup needed to reach these psychological price points.
Dynamic Markup: Adjust markup based on demand, season, or inventory levels. Increase markup for high-demand items, decrease to clear slow-moving inventory.
Pro Tip: Use this calculator to test different markup scenarios. What happens if you increase markup by 10%? How does it affect your selling price and profit margin? Can the market bear the higher price? Regular price testing helps optimize profitability without losing sales.
Disclaimer
This calculator provides estimates for informational purposes only. Actual pricing decisions should consider market conditions, competitor pricing, customer willingness to pay, and business strategy. Markup percentages are industry averages that may not reflect your specific situation. Always validate pricing with market research and consider total business costs beyond direct product costs. Consult with business advisors for pricing strategy decisions.
Markup Calculation Results
Date:
Calculation Type:
Cost Price:
Markup Percentage:
Selling Price:
Markup Amount:
Profit Amount:
Profit Margin:
Generated by SabiCalculator Markup Calculator