Markup Calculator
Markup is the percentage you add to cost to set a price: price = cost × (1 + markup). Enter your cost and markup and this calculator returns the selling price, the profit and the margin that price produces.
Use this markup calculator to turn what an item costs you into a selling price. Enter the cost and the markup percentage you want to add, and it shows the price to charge, the profit in dollars, and — importantly — the profit margin that markup translates into, so you can price with confidence.
Enter the cost and markup, then press Calculate.
How the markup calculator works
Markup pricing starts from what you paid. The calculator takes your cost, multiplies it by the markup percentage to find the profit you are adding, and adds that to the cost to give the selling price. Then it does the step most people skip: it converts that markup into the margin it actually produces, by dividing the profit by the selling price. That second number is the one that tells you how profitable the sale really is.
The two measures are joined at the hip but never equal: markup is always the bigger percentage because it is measured against the smaller number, the cost. This is why a "50% markup" and a "50% margin" are very different prices. Once you have priced with markup here, cross-check the result with the profit margin calculator, and use the break-even calculator to see how many units at this price cover your fixed costs.
The markup formulas
- Cost — what you pay for the item
- Markup — percent added on top of cost
- Price — cost plus profit
Markup is a rule; margin is the truth
Retailers love markup because it is a simple, repeatable rule: buy something, add a set percentage, move on. That consistency is genuinely useful across a large catalogue. But the markup you apply and the margin you earn are different numbers, and only the margin tells you what share of each sale you actually keep. A business that thinks a 40% markup means a 40% margin is quietly overestimating its profitability — the real margin is 28.6%. Translating one into the other, as this tool does, keeps your pricing honest.
Choosing the right markup
The right markup covers far more than the item's cost. It has to absorb your overheads, shrinkage, returns, discounts and the cost of the sales that never happen, and still leave a profit. That is why retail markups often look large — a keystone markup of 100% is common — yet translate into more modest margins once everything is counted. Set your markup by working back from the margin you need to run the business, not by copying a number that sounds about right.
Keystone markup and typical retail markups
Retailers lean on rules of thumb to price quickly, and the best known is keystone markup — simply doubling the cost, a 100% markup that turns a $20 item into a $40 price. Keystone is popular because it is easy and builds in a comfortable cushion for overheads and discounts, but it is a starting point, not a law. Actual markups vary widely by category: apparel often runs 50% to over 100%, groceries just 15% to 25% because they sell on volume, furniture and jewellery can carry very high markups, and electronics tend to be thin. The right markup has to cover not just the item cost but rent, staff, shrinkage and the discounts you will inevitably give, then still leave a profit. Use a category norm as a guide, then check the resulting margin here to be sure the price actually earns what you need.
Estimate only — not financial advice. A markup must cover overheads and risks beyond item cost. Confirm figures before setting prices.
How to use it & key terms
Enter the cost and the markup percentage, then press Calculate to see the selling price, profit and margin.
| Term | What it means |
|---|---|
| Cost | What you pay to make or buy the item. |
| Markup | The percentage of cost you add to set the price. |
| Selling price | Cost plus the markup profit. |
| Profit | The dollars added by the markup. |
| Margin | Profit as a percentage of the selling price. |
| Keystone | A 100% markup — doubling the cost — common in retail. |
Sources & methodology
The calculator multiplies the cost by the markup percentage to find the profit, adds it to the cost to give the selling price, and divides the profit by the selling price to express the result as a margin. These are the standard cost-plus pricing relationships used in retail and wholesale, where markup is measured against cost and margin against the selling price. The link between them is markup = margin ÷ (1 − margin), which is why a given markup always yields a smaller margin.
Sources: Standard cost-plus (markup) pricing and markup-to-margin relationships used in retail and wholesale.
How discounts quietly eat into your markup
Every markup is built to be the entire profit on a sale, which is why a discount does more damage than it first appears. A price cut comes out of that profit, not out of the cost you have already paid — so a reduction that looks small beside the price can be a large share of what you were actually going to keep. Trimming a product by a tenth of its price might surrender a quarter or more of the markup on it, because the markup was only ever a slice of that price to begin with.
The deeper the discount, the faster this bites, and it compounds when a business leans on frequent sales. A shop that runs a "small" promotion every few weeks can find that its everyday markup was really its sale markup, with the full price rarely charged. Each markdown also raises the number of units you must sell just to earn the same total profit, so a price cut is really a wager that the extra volume will more than offset the thinner margin on every sale — a wager that does not always pay off.
The remedy is to plan for discounts before you set the price, not after. If you know a share of sales will go out reduced, build that expectation into the original markup so the average price still leaves the profit you need. Watch the blended result across full-price and discounted sales rather than the sticker on any single item, and set a floor below which a discount gives away more profit than the extra sales can recover. A break-even view helps here, showing how many additional units a price cut must generate before it is worth making, which you can explore with the break-even calculator.
None of this makes discounts a mistake — they clear ageing stock, win first-time buyers, reward loyal ones and answer competitors — but they work best when they are deliberate rather than habitual. Treat every markdown as spending part of your markup to buy a specific result, whether that is faster turnover or a new customer, and price with enough cushion that the sales you plan to run still leave you comfortably ahead. A markup set with no room for discounting is really a plan to erode your own margin the first time you hold a sale.
Frequently asked questions
What is markup?
Markup is the amount you add to the cost of an item to set its selling price, expressed as a percentage of the cost. A 50% markup on a $40 item adds $20, giving a $60 price. It is the pricing method most retailers and wholesalers use day to day because it starts from the number they know best — what they paid — and applies a consistent rule on top.
How do you calculate markup?
Multiply the cost by the markup percentage to get the profit, then add it to the cost for the selling price. With a $40 cost and a 50% markup, the profit is $20 and the price is $60. To go the other way and find the markup from a known cost and price, subtract cost from price and divide by the cost: a $20 profit on a $40 cost is a 50% markup.
What is the difference between markup and margin?
Markup measures profit against cost, while margin measures the same profit against the selling price. Because the selling price is larger, the margin percentage is always smaller than the markup. A 50% markup produces only a 33.3% margin, and a 100% markup produces a 50% margin. Pricing from markup but reporting in margin — or mixing them up — is a classic source of pricing errors.
How do I set a selling price from markup?
Take your cost and multiply it by one plus the markup as a decimal. For a 50% markup, multiply the cost by 1.5; for a 30% markup, multiply by 1.3. This calculator does it instantly and also shows the profit in dollars and the margin the price produces, so you can check the price meets both a markup rule and a margin target at the same time.
What markup do I need for a specific margin?
Because margin and markup are linked, each margin corresponds to one markup. To hit a 25% margin you need a 33.3% markup; for a 40% margin you need a 66.7% markup; for a 50% margin you need a 100% markup. The general rule is markup = margin ÷ (1 − margin). Enter a markup here and the calculator shows the margin it yields, so you can adjust until the margin matches your goal.
Why do businesses use markup instead of margin?
Markup is convenient because it starts from the cost, which is the number a buyer or shopkeeper already has in front of them. Applying a standard markup across a catalogue is quick and consistent, and it guarantees every item is priced above cost. The downside is that markup can disguise the true profitability of a sale, which is why it is worth translating markup into margin — as this tool does — before judging how profitable a price really is.
What is the difference between wholesale and retail price?
Wholesale price is what a retailer pays to buy goods from a manufacturer or distributor, usually in bulk and at a substantial discount. Retail price is what the end customer pays in the shop, after the retailer adds a markup to cover its costs and profit. The gap between the two is the retailer's markup: a store might buy an item wholesale for $10 and sell it at retail for $20, a 100% markup. Manufacturers set a wholesale price low enough that retailers can mark it up and still sell competitively, which is why the same product carries different prices along the supply chain.
Why is my margin lower than my markup?
Because markup and margin are measured against different numbers. Markup is your profit as a percentage of the cost; margin is the same profit as a percentage of the selling price. Since the price is always higher than the cost, the margin percentage always comes out smaller. A 50% markup, say $10 cost sold for $15, is only a 33.3% margin, because the $5 profit is a third of the $15 price but half of the $10 cost. Always convert markup to margin, as this tool does, before trusting a price.