This markup calculator handles the two pricing questions every seller faces: given my cost and target markup percentage, what should the selling price be — and given my cost and current price, what markup am I actually earning? It also converts your markup into the equivalent profit margin, since the two are constantly confused.
Markup expresses profit as a percentage of cost, which makes it the natural tool for cost-plus pricing: start from what an item costs you, add your markup, and the price falls out. Retailers, wholesalers, contractors, and restaurants all price this way.
The Markup Formula (and How to Reverse It)
Both directions come from one relationship:
Selling price = Cost × (1 + Markup% ÷ 100)
So a $50 cost with a 60% markup sells for $50 × 1.60 = $80. To find the markup percentage from a cost and price, reverse it:
Markup% = (Price − Cost) ÷ Cost × 100
An item bought for $50 and sold at $80 carries a markup of ($80 − $50) ÷ $50 = 60%. The dollar difference — $30 here — is your gross profit per unit. This cost plus markup approach guarantees every sale contributes a predictable profit on top of what you paid, as long as your cost figure includes freight, packaging, and other landed costs.
Markup vs Margin — Not the Same Number
Markup divides profit by cost; margin divides the same profit by price. Because price is bigger than cost, the margin percentage is always smaller than the markup percentage for the same sale:
- 20% markup = 16.7% margin
- 25% markup = 20% margin
- 50% markup = 33.3% margin
- 60% markup = 37.5% margin
- 100% markup = 50% margin
- 200% markup = 66.7% margin
To convert: Margin = Markup ÷ (1 + Markup), both as decimals. Mixing them up is expensive — a shop targeting a 50% margin but applying a 50% markup earns only a 33.3% margin, a third less profit than planned. Use our margin calculator when you want to work from the price side.
Example: Pricing a Product That Costs $50
A boutique buys jackets for $50 landed cost and applies keystone pricing — a 100% markup, the traditional retail standard.
- Selling price: $50 × (1 + 100 ÷ 100) = $100.
- Profit per jacket: $50.
- Equivalent margin: $50 ÷ $100 = 50%.
A competitor sells the same jacket for $80. Its markup is ($80 − $50) ÷ $50 = 60%, a 37.5% margin. If the boutique matches that price, each sale earns $30 instead of $50 — it must sell 67% more jackets to make the same total profit. That arithmetic is why small discounts require surprisingly large volume increases to break even.
Frequently Asked Questions
What is the difference between markup and margin?
Markup is profit as a percentage of cost; margin is profit as a percentage of the selling price. Selling a $50 item for $80 gives a 60% markup but a 37.5% margin — the same $30 profit divided by different bases. Margin is always the smaller number, and confusing the two leads to underpricing.
How do I calculate markup percentage?
Subtract cost from selling price, divide by cost, and multiply by 100: Markup% = (Price − Cost) ÷ Cost × 100. An item that costs $40 and sells for $60 has a markup of ($60 − $40) ÷ $40 × 100 = 50%. To go the other way, multiply cost by (1 + markup ÷ 100) to get the price.
What is a 100% markup?
A 100% markup means the selling price is double the cost — a $25 item sells for $50. Retailers call this keystone pricing, and it has been the traditional default in apparel and gift retail. A 100% markup is equivalent to a 50% gross margin: half of every sales dollar is profit before operating expenses.
What markup should I use for retail?
Typical retail markups run 50%–100% (33%–50% margins), with keystone (100%) the classic starting point for apparel and specialty goods. Grocery works on much thinner markups of 5%–25%, while jewelry, accessories, and restaurant beverages often exceed 200%–300%. Set your markup to cover operating costs and target profit at your realistic sales volume, then sanity-check against competitors.
How do I convert markup to margin?
Divide the markup by one plus the markup (as decimals): Margin = Markup ÷ (1 + Markup). A 60% markup converts to 0.60 ÷ 1.60 = 37.5% margin. Going the other way, Markup = Margin ÷ (1 − Margin), so a 40% margin requires a 66.7% markup on cost.