What to enter
- What do you want to find?
- “Selling price from a markup” computes a price from your cost and a markup percentage. “The markup from a cost and a price” works out the markup you are earning when you know both.
- Cost per unit
- What each unit costs you: the purchase price from a supplier, or your production cost. Include costs that belong to the unit, such as freight and packaging.
- Markup on cost
- The percentage you add on top of cost. A 40% markup on a $50 cost adds $20.
- Selling price per unit
- In the second mode, the price you charge.
- Number of units
- Optional. Enter a quantity to see total cost, revenue and profit for the batch.
How to read your results
The headline shows the selling price, or the markup, depending on the mode. The table then lists profit per unit, the markup on cost and the profit margin, which is profit as a share of the selling price. Showing both is deliberate: markup and margin describe the same profit against different bases, and mixing them up leads to underpricing. If you enter more than one unit, the table adds total cost, total revenue and total profit. The reference table at the bottom of the results lists common markups from 10% to 100% with the margin each produces and the price it would give for your cost.
The formulas
Markup = (price − cost) ÷ cost × 100
Margin = (price − cost) ÷ price × 100
Markup = margin ÷ (1 − margin)Both written as decimals. A 25% markup (0.25) gives a margin of 0.25 ÷ 1.25 = 20%.
Because the price is always larger than the cost, a markup percentage is always larger than the margin percentage for the same profit.
Worked examples
A $50 item with a 40% markup
The selling price is $50 × 1.40 = $70.00. Profit is $20.00. The markup is 40.0%, and the margin is 28.6%, which is lower because profit is compared with the higher price.
Finding the markup. If that item costs $50 and sells for $80, the profit is $30.00. The markup is 60.0% and the margin is 37.5%.
A batch. Buying 200 units of the $50 item and selling them at the 40% markup costs $10,000, brings in $14,000 and earns $4,000.
The 100% markup. Doubling cost, sometimes called keystone pricing in retail, is a 100% markup but only a 50% margin.
Selling below cost. A $45 price on a $50 cost is a -10.0% markup, a loss of $5.00 per unit.
Why markup and margin get confused
People say “I want 30%,” and it can mean two different prices. If you mark up a $70 cost by 30%, you charge $91 and keep a 23.1% margin. If you want a 30% margin on the same cost, you must charge $100, which is a 42.9% markup. The gap grows with the percentage: a 100% markup is a 50% margin, and a margin can never reach 100% while a markup can go far above it.
The rule to remember is that markup uses cost as its base and margin uses price as its base. Pick one and be explicit about it with suppliers, employees and accountants. Markup is convenient when you are building a price up from cost. Margin is the better yardstick when you are comparing your profitability against revenue, targets or competitors. The profit margin calculator works from margin, so it can find the price for a target margin directly.
Also remember that discounts and returns cut into margin faster than most people expect. Selling a 25% markup item (a 20% margin) at 10% off leaves a margin of about 11%, because the discount comes out of the same profit. The discount calculator shows the price after a discount, and comparing it with cost shows what remains.
Assumptions and limits
The calculator prices one product at a time and treats cost as a single number per unit. It does not include overhead allocation, taxes, shipping to customers, payment processing fees, returns or volume discounts, all of which reduce actual profit. Pricing should also reflect what customers will pay and what competitors charge, not only cost. Use the result as a starting point, then test it against the market. For percentage arithmetic beyond pricing, use the percentage calculator.
Frequently asked questions
What is markup?
Markup is the amount added to the cost of a product to arrive at the selling price, expressed as a percentage of cost.
What is the difference between markup and margin?
Both describe profit, but markup measures it against cost and margin measures it against the selling price. A 25% markup is a 20% margin.
How do I calculate a selling price from a markup?
Multiply the cost by one plus the markup as a decimal. A $50 cost and a 40% markup give $50 × 1.4 = $70.
Can markup be more than 100%?
Yes. A price more than double the cost has a markup above 100%. Margin, by contrast, can never reach 100%.
How do I get a 50% margin?
Price at double the cost. That is a 100% markup and a 50% margin.