Markup Calculator
Calculate markup percentage from cost and selling price, or work out the selling price a given markup produces. Markup expresses profit as a percentage of what an item cost you.
Markup formula
- Markup percentage:
markup = (price - cost) / cost x 100 - Price from markup:
price = cost x (1 + markup / 100)
Here cost is what you pay to acquire or make the item and price is what you charge for it. Markup is the classic cost-plus pricing tool: start from cost, add a percentage, and the price falls out.
Markup is not the same as margin, and mixing them up is one of the most common pricing errors:
- Markup divides profit by cost:
markup = profit / cost. - Margin divides profit by revenue:
margin = profit / revenue.
A 100% markup is only a 50% margin. In general, the markup figure is always larger than the margin figure for the same sale, and the gap widens as prices rise relative to cost.
Worked example
You buy an item for 40 and apply a 50% markup.
- Price:
40 x 1.5 = 60 - Profit:
60 - 40 = 20 - Margin on that sale:
20 / 60 = 0.333, or about 33.3%
So a 50% markup yields roughly a 33.3% margin. Running it backwards: if a listed price is 60 and cost is 40, the markup is (60 - 40) / 40 = 50%.
When to use this calculator
- Cost-plus pricing. Apply a consistent markup across a catalogue so every item recovers its cost plus a predictable profit.
- Checking a reseller price. Enter wholesale cost and street price to see what markup the market currently supports for a product category.
- Translating targets. Convert a margin target from your accounts into the markup you need to apply at the shelf, or the reverse.
- Quoting custom work. Mark up materials and bought-in components consistently when building a quote, so small jobs are not accidentally underpriced.
Common mistakes
- Applying a markup equal to your desired margin. To hit a 40% margin you need about a 66.7% markup, not 40%.
- Marking up only the purchase price and forgetting freight, duties, packaging, and fees that belong in true unit cost.
- Using one flat markup for everything. Slow-moving or bulky items usually need higher markups to cover storage and handling.
- Ignoring what the market will bear; markup guarantees a price covers cost, not that anyone will pay it.
- Rounding the price down after applying markup and not rechecking whether the intended profit survived the rounding.
Related calculators
The marketplace profit calculator shows what is left of your markup after platform fees, and the discount percentage calculator helps plan promotions without giving all of it back. For the wider picture, the customer acquisition cost calculator compares your per-sale profit with what a customer costs to win, while the inventory turnover calculator and safety stock calculator cover the stock side of pricing decisions.