Markup Calculator
This markup calculator helps you set profitable prices based on product cost and desired markup percentage. It is useful for retail, ecommerce, wholesale, and service-based businesses.
Cost & Markup
Selling Price
Enter cost and markup to calculate selling price.
Markup vs. Profit Margin: The Key Difference
Markup and profit margin are related but not the same. Markup is calculated on cost: a 50% markup on a $100 item sets the price at $150. Profit margin is calculated on revenue: that same $50 profit on a $150 sale is a 33% margin. Both describe profitability, but confusing them leads to pricing errors that can erode your profit without realizing it.
The conversion between them: Margin = Markup ÷ (1 + Markup). A 50% markup equals a 33.3% margin. A 100% markup equals a 50% margin. Retailers typically think in markup; accountants and analysts typically report margin — knowing both prevents miscommunication when setting prices.
Setting the Right Markup for Your Business
Your markup needs to cover not just product cost but also overhead, labor, shipping, returns, and your desired profit. A useful starting point: add up all costs attributed to a product (cost of goods, packaging, a share of rent and payroll), then set a markup that leaves a meaningful margin after those fully-loaded costs. Typical markups range from 15–20% for groceries, 50–100% for clothing and home goods, and 200–500% for jewelry and cosmetics. If competitors with similar costs are pricing lower, your markup is likely too high — or your costs need attention.
Frequently Asked Questions
What markup percentage should I use?
It depends on your industry and cost structure. Grocery stores operate on 15–25% markup because of high volume and thin margins. Restaurants typically mark up food 200–400% to cover labor, rent, and spoilage. Clothing retailers often use 100–200% ("keystone" is the term for a 100% or 2× markup). Software and digital products can have much higher markups since marginal cost is near zero. Start with what competitors charge, then work backward to see if you can hit that price profitably.
How do I calculate selling price if I know the margin I want?
If you want a 40% margin, divide cost by (1 − margin): Cost ÷ 0.60. A $60 product needs a selling price of $100 ($60 ÷ 0.60) to achieve a 40% margin. Compare that to the markup approach: a 40% margin corresponds to a markup of about 67% ($60 × 1.667 = $100). The end price is the same — just two ways of describing the same relationship between cost and price.
Should I apply markup on landed cost or just product cost?
Apply markup on landed cost — the total cost to get the product ready for sale, including manufacturing, freight, duties, and inspection. Marking up only the factory price ignores real costs and understates what you need to charge. For example, if a product costs $40 at the factory but $55 landed after shipping and duties, marking up $40 instead of $55 means you are effectively subsidizing logistics out of your margin. Always build markup from the full cost base.