How to use this markup calculator
- Cost, enter what the item costs you (materials, wholesale price, or unit cost).
- Markup, enter the percentage you want to add on top of that cost.
- Read your selling price, profit and profit margin %, they update instantly as you type.
Nothing is submitted or stored: the numbers never leave your device, so you can price your products and check your figures privately.
Markup vs margin, what is the difference?
Markup and margin both describe profit, but they measure it against different things, and confusing the two is one of the most common pricing mistakes. Markup is applied on top of cost, so the selling price is price = cost × (1 + markup ÷ 100). From there the profit is simplyprofit = price - cost. Margin is that same profit measured against the selling price, so margin% = profit ÷ price × 100. Because the selling price is always larger than the cost on a profitable item, the margin percentage is always smaller than the markup percentage.
Markup is the natural number to think in when you are setting a price from a known cost, which is exactly what this tool does. Margin is the number to think in when you want to know how much of each sale you actually keep. This calculator gives you both at once, so you never have to guess which one a supplier or report is talking about.
Worked example
Say an item costs you $40 and you want a 50% markup. The selling price is$40 × (1 + 50 ÷ 100) = $40 × 1.5 = $60. Your profit is $60 - $40 = $20. As a margin, that profit is $20 ÷ $60 × 100 = 33.3%. So a 50% markup produces a 33.3% margin on this item, the same money described two different ways, which is exactly why it pays to be clear about which one you mean.
Tip: Markup has no upper limit, but margin can never reach 100% (you would need a cost of zero). If you need a specific margin, set a markup that is higher than the margin figure you are aiming for.
Frequently asked questions
How do I calculate selling price from cost and markup?
Multiply your cost by one plus the markup percentage divided by 100. For example, a $40 cost with a 50% markup gives a selling price of 40 × 1.5 = $60.
What is the difference between markup and margin?
Markup is profit as a percentage of cost, while margin is profit as a percentage of the selling price. A 50% markup is only a 33.3% margin, because margin divides the same profit by the larger sale price.
How do I convert a markup into a margin?
Work out the selling price and profit first, then divide the profit by the selling price and multiply by 100. This calculator does it for you, showing the margin percentage alongside the price and profit.
What markup should I use?
It depends on your industry, costs and competition. Retail often uses 50% to 100% markups, while some sectors use much more or less. Start from the margin you need to cover overheads and make a profit, then set the markup that delivers it.
Is my data uploaded?
No, everything is calculated on your device and nothing is sent anywhere.