Markup Calculator
Calculates how much you have added above the cost price, expressed as a percentage of cost. Enter cost and selling price to see markup percentage and profit per unit.
Positive markup — selling above cost.
Why Markup Calculator Matters
Markup is the foundation of cost-plus pricing. Retailers typically apply 50–100% markup on goods; wholesale distributors use 15–30%. Knowing your markup ensures you are consistently covering costs and hitting target margins across your entire product catalogue — not just on individual items.
Example Calculation
A shoe retailer buys trainers at $45 wholesale and sells them for $110. Profit per pair = $110 − $45 = $65. Markup = ($65 / $45) × 100 = 144%. This is a high markup, which is typical for branded footwear. The corresponding profit margin is 59%. If the retailer runs a 20% off sale, the selling price drops to $88, and markup falls to 96% with a margin of 49% — still healthy, but worth knowing before discounting.
Practical Tips
- Use markup when building your price list — it is easier to apply a consistent markup to all cost prices than to manually set each selling price. A 100% markup rule doubles every cost price automatically.
- Do not confuse markup with margin. If you want a 50% profit margin, you need a 100% markup — not a 50% markup. The math is different and the mistake is surprisingly common.
- Account for returns, shrinkage, and payment processing fees in your markup. If 5% of goods are returned or damaged, your effective markup needs to be higher to maintain target margins.
- Review markups when supplier costs change. A 10% rise in COGS on a 60% markup drops your margin from 37.5% to 32% — small cost changes have a real margin impact.
Frequently Asked Questions
- Markup = (Selling Price − Cost) / Cost × 100. It expresses profit as a percentage of cost. A product that costs $50 and sells for $80 has a markup of 60%.
- Markup is profit divided by cost. Margin is profit divided by revenue (selling price). The same product can have a 60% markup and only a 37.5% margin. Always clarify which one you mean when setting pricing targets.
- Selling Price = Cost × (1 + Markup / 100). For a 60% markup on a $50 cost: $50 × 1.60 = $80. For a 100% markup: $50 × 2.00 = $100.
- Markup = Margin / (1 − Margin). To achieve a 40% margin: 0.40 / (1 − 0.40) = 0.667 = 67% markup. To hit 50% margin: 0.50 / 0.50 = 100% markup.
- General retail: 50–100% (keystone pricing doubles the cost). Clothing and apparel: 100–300%. Electronics: 5–25% (low margins, high volume). Jewellery: 100–200%. Restaurants on food: 200–300%. Industry norms vary enormously.
- Every discount reduces both markup and margin. A 20% discount on an item with 60% markup reduces markup to 28% and margin from 37.5% to 22%. Model your discount scenarios before running promotions to protect profitability.
Disclaimer
These tools provide estimates for informational purposes only. Results should not be used as the sole basis for financial, business, or legal decisions. Always consult qualified professionals for advice specific to your situation.