Markup Calculator
Calculate your selling price and profit instantly using markup percentage — no spreadsheet needed.
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%
Your Results
Selling Price
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per unit
Profit Amount
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per unit
Applied Markup
—
above cost
Understanding Markup
What is Markup?
Markup is the percentage you add on top of your cost price to arrive at your selling price. It covers your overhead, labor, and desired profit — expressed as a percent of cost.
Selling Price = Cost × (1 + Markup% ÷ 100)
Profit = Selling Price − Cost
Markup vs. Margin
Markup and margin are often confused. Markup is based on cost; margin is based on selling price. A 100% markup means you doubled your cost — but that only gives you a 50% profit margin, not 100%.
Margin = Profit ÷ Selling Price × 100
Markup = Profit ÷ Cost × 100
Why small businesses use markup pricing
- Simple to apply. Once you know your costs, a consistent markup rule means pricing every product takes seconds, not spreadsheet sessions.
- Covers hidden costs. A proper markup bakes in overhead — rent, labor, shipping — so you never accidentally pocket less than you think.
- Easy to adjust for market conditions. Seasonal demand, competitor pricing, or supplier increases can be reflected by adjusting the markup percentage without rebuilding your whole pricing model.
- Industry benchmarks exist. Retail commonly uses 50–100% markup. Restaurants often aim for 200–300% on food. Knowing your industry norm helps you stay competitive and profitable.
Business Example
A boutique buys a jacket for $50 and applies a 40% markup. The selling price becomes $70, generating $20 profit per unit. That $20 must cover rent, staff, and card processing fees — so understanding markup helps ensure the price actually works.
Cost
$50
Markup
40%
Selling Price
$70
Profit
$20
Markup vs. Margin: side-by-side
| Feature | Markup | Profit Margin |
|---|---|---|
| Based on | Cost price | Selling price |
| Formula | Profit ÷ Cost × 100 | Profit ÷ Revenue × 100 |
| 100% value means | You doubled your cost | Pure profit — impossible in practice |
| Best used for | Setting prices from cost | Measuring business health |
| Always higher than the other? | ✓ Always ≥ margin | ✗ Always ≤ markup |
Frequently Asked Questions
Markup is the percentage added to your product's cost price to arrive at the final selling price. For example, if something costs you $40 and you sell it for $60, your markup is 50% ($20 profit ÷ $40 cost × 100). Markup always references cost as its base, which distinguishes it from profit margin.
The formula is straightforward: Selling Price = Cost × (1 + Markup% ÷ 100). For a $100 item with 60% markup, that's $100 × 1.6 = $160. Your profit is then $60. Alternatively, to find the markup percentage from a known cost and selling price: Markup% = (Selling Price − Cost) ÷ Cost × 100.
No — and confusing the two is one of the most common small business pricing mistakes. Markup is calculated on cost; profit margin is calculated on selling price. A 50% markup on a $100 product gives you a selling price of $150 and a profit of $50 — but that's a 33.3% margin (not 50%). Markup will always be a higher percentage number than the equivalent margin.
It depends heavily on industry. General retail typically targets 50–100% markup (known as "keystone" at 100%). Restaurants often apply 200–300% to food costs. Service businesses sometimes use 20–50% on materials. The key is to ensure your markup covers all overhead — not just the direct product cost — or you may turn a profit on paper but lose money in practice.
Markup is your pricing foundation. Set it too low and every sale quietly drains your business — high revenue with poor margins is a classic trap. Set it correctly and you build in a buffer for slow months, unexpected costs, and growth investment. Consistent markup discipline also makes it easier to give discounts strategically without accidentally selling below cost.