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Markup Calculator

Calculate selling price from cost and markup percentage. Or enter a desired selling price to reverse-calculate the implied markup and equivalent profit margin.

$

Your cost to purchase or produce one unit

%

Percentage to add on top of cost

OR
$

Enter a selling price to reverse-calculate markup

Tip: 50% markup = 33.3% margin. 100% markup = 50% margin.

Enter your cost and markup percentage, then click Calculate to see the selling price.

How Markup Pricing Works

What is Markup?

Markup is one of the most common pricing strategies in business. It takes your cost for a product or service and adds a fixed percentage on top to arrive at a selling price. The added amount covers your operating expenses and generates profit.

The Markup Formula

The core formula is simple: Selling Price = Cost x (1 + Markup Percentage / 100). If a widget costs you $40 and you apply a 75% markup, the selling price is $40 x 1.75 = $70. Your profit per unit is $30.

Markup vs. Margin

These two terms are frequently confused. Markup is calculated on cost; margin is calculated on selling price. In the example above, the $30 profit represents a 75% markup (30 / 40) but only a 42.9% margin (30 / 70). This distinction matters when communicating pricing internally versus analyzing financial statements. Income statements report margins, while purchasing teams think in markups.

Choosing the Right Markup

Your ideal markup depends on several factors: industry norms, competition, overhead costs, and desired profit. High-volume, low-touch products like groceries can thrive on slim markups of 5-15%. Specialty retail or custom services often need 100%+ markups to cover higher labor, rent, and marketing costs. The key is ensuring your markup, after covering all expenses, leaves an adequate net profit.

Reverse Calculation

Sometimes you know the selling price the market will bear and need to work backward to find the implied markup. This calculator supports that reverse approach: enter cost and desired selling price, and it will compute the markup percentage and equivalent margin for you. This is useful when competitors set the price and you need to determine whether your cost structure can support it.

Frequently asked questions

Markup is the percentage added to the cost of a product to determine its selling price. It represents how much more than cost you charge. For example, if an item costs $50 and you apply a 60% markup, the selling price is $80. Markup is always calculated based on cost, not on the selling price. It is a key pricing concept used by retailers, wholesalers, and manufacturers to ensure they cover expenses and earn a profit on every unit sold.

Markup and margin both measure profit, but they use different bases. Markup is profit as a percentage of cost; margin is profit as a percentage of selling price. Because the selling price is always larger than cost (when profitable), the margin percentage is always lower than the markup percentage for the same dollar profit. Common conversions: 25% markup = 20% margin, 50% markup = 33.3% margin, 100% markup = 50% margin, 200% markup = 66.7% margin. Use markup when setting prices from cost; use margin when analyzing revenue profitability.

Markup percentages vary widely by industry. Grocery stores typically use 5-15% markup. Clothing retail often marks up 100-300% (keystone or more). Restaurants mark up food 200-400% and beverages even higher. Electronics retail uses 10-30%. Jewelry can see 100-400% markup. Professional services may mark up labor costs 50-150%. The right markup depends on your overhead costs, competitive landscape, and target profit margin. Industries with higher operating costs or lower volume generally require higher markups to remain profitable.

To convert margin to markup, use the formula: Markup % = (Margin % / (100 - Margin %)) x 100. For example, if you know your target margin is 40%, the required markup is (40 / 60) x 100 = 66.7%. Conversely, to convert markup to margin: Margin % = (Markup % / (100 + Markup %)) x 100. So a 66.7% markup gives (66.7 / 166.7) x 100 = 40% margin. This calculator automatically shows both figures so you can see the relationship instantly.

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