Markup is the amount added to cost to reach a selling price, expressed as a percentage of the cost. A 50% markup on a $60 item gives a $90 price; that same $30 of profit is a 33.3% margin, because margin is measured against the price instead. Retailers, wholesalers and tradespeople usually think in markup because it starts from the cost they know; this calculator gives the price for any cost and markup, or works back from cost and price to the markup you are actually charging.
Watch the conversion: a shop that wants a 50% margin needs a 100% markup (doubling the cost), not a 50% one. The table on our business calculators page lists the common equivalents.
Profit Margin and Markup Calculator
Margin and markup describe the same gap between cost and price from two different sides, and mixing them up is one of the most expensive pricing mistakes a small business can make. Margin is profit as a share of the selling price; markup is profit as a share of the cost. On a product that costs $60 and sells for $100, the profit is $40, the gross margin is 40% and the markup is 66.7%.
The margin and markup calculator works in three directions. Give it cost and price and it returns both percentages. Give it cost and a target margin and it returns the price you need to charge: $60 at a 40% margin is $60 ÷ (1 − 0.40) = $100. Give it cost and a markup and it returns the price and the margin that markup actually delivers: a 50% markup on $60 is $90, which is only a 33.3% margin.
Related Calculators
Frequently Asked Questions
How do I calculate selling price from markup?
Multiply the cost by 1 plus the markup: $60 × (1 + 0.50) = $90. Enter the cost and markup percentage in the 'cost and markup' mode.
What markup equals a 40% margin?
66.7%. Markup = margin ÷ (1 − margin) = 0.40 ÷ 0.60. In general the markup is always higher than the margin for the same profit.
What is keystone pricing?
A 100% markup, i.e. doubling the wholesale cost, which is a 50% gross margin. It is a common default in fashion and gift retail.
