Markup Calculator
Find your selling price and profit margin from any cost and markup percentage. Enter cost and desired markup to get your optimal price.
How Markup Pricing Works
Markup pricing is the most common method for setting retail and wholesale prices. You start with your cost — the amount you pay to produce or acquire a product — and add a percentage to arrive at your selling price. The markup percentage must be large enough to cover all costs not included in COGS (rent, labor, marketing) and leave a net profit.
The markup formula is: Selling Price = Cost × (1 + Markup / 100). A $20 item with a 150% markup sells for $20 × 2.50 = $50. The $30 profit is 60% of the $50 selling price — so the margin is 60%, even though the markup is 150%.
Markup % to Margin % Reference Table
| Markup % | Resulting Margin % | Multiplier |
|---|---|---|
| 20% | 16.7% | 1.20× |
| 50% | 33.3% | 1.50× |
| 100% | 50.0% | 2.00× |
| 150% | 60.0% | 2.50× |
| 200% | 66.7% | 3.00× |
| 300% | 75.0% | 4.00× |
Setting the Right Markup for Your Business
The correct markup depends on your overhead costs and target net profit. First, calculate your total fixed costs per month (rent, salaries, insurance, utilities). Then divide by your expected monthly unit sales to find the overhead cost per unit. Add this to your variable COGS to get your true cost per unit. Your markup must be at least high enough to cover this true cost before adding net profit.
Many small businesses underprice by forgetting to include their own labor in COGS, or by failing to account for returns, damaged goods, and shrinkage. Build a 10–15% buffer into your markup to absorb these hidden costs.
Frequently Asked Questions
What is markup in pricing?
Markup is the amount added to the cost of a product to set its selling price, expressed as a percentage of the cost. Formula: Selling Price = Cost × (1 + Markup% / 100). If a product costs $40 and you apply a 75% markup, the selling price is $40 × 1.75 = $70. The markup covers your overhead expenses and desired profit.
What is the difference between markup and margin?
Both measure profitability but from different perspectives. Markup % = Profit / Cost × 100. Margin % = Profit / Selling Price × 100. A 50% markup yields a 33.3% margin. A 50% margin requires a 100% markup. Retailers commonly think in margin; manufacturers often think in markup. Know which your business uses to avoid pricing errors.
What markup percentage should I use?
Typical markups by industry: Retail clothing: 100–300%. Food and grocery: 15–25%. Electronics: 10–30%. Jewelry: 100–200%. Furniture: 200–400%. Services/consulting: 50–300%+ on cost. The right markup must cover your fixed overhead costs (rent, payroll, utilities) divided across all units, plus your desired net profit. Calculate your break-even markup before adding profit.
How do I convert a desired margin to a markup?
Use this formula: Markup% = Margin% / (1 − Margin%). Example: to achieve a 40% margin, you need: Markup = 0.40 / (1 − 0.40) = 0.40 / 0.60 = 66.7% markup. Conversely, to convert markup to margin: Margin% = Markup% / (1 + Markup%). A 66.7% markup gives: Margin = 0.667 / 1.667 = 40%.