Markup Calculator

How to use the calculator

1. Mode: choose From markup to set a price, or From selling price to analyze a price you already have.
2. Cost: what one unit costs you, such as the wholesale price or your cost of goods.
3. Markup (first mode): the percentage you add on top of cost.
4. Selling price (second mode): the price the customer pays, before sales tax.

The calculator returns the selling price, the profit per unit, the markup and the margin.

Markup vs. margin: the formulas

Both percentages describe the same profit, but they use a different base. Markup is measured against cost; margin is measured against the selling price.

• Selling price = Cost × (1 + Markup)
• Profit = Selling price − Cost
• Markup = Profit ÷ Cost
• Margin = Profit ÷ Selling price

Because price is always larger than cost when you make a profit, margin is always smaller than markup. They convert into each other like this:

Margin = Markup ÷ (1 + Markup) and Markup = Margin ÷ (1 − Margin)

The calculator works per unit and treats cost as the direct cost of the item. It does not include overhead such as rent, payroll or shipping, nor sales tax, which is collected from the customer on top of the price.

Examples

1. Pricing a product with a 50% markup

An item costs you $40.00. With a 50% markup, the selling price is $60.00 and the profit is $20.00. The margin, however, is only 33.33%, because $20.00 is a third of the $60.00 price.

2. Checking a price you already charge

You buy a product for $25.00 and sell it for $40.00. The profit is $15.00, the markup is 60% and the gross margin is 37.5%.

3. Hitting a target margin

If you want a 40% margin, the markup you need is 0.40 ÷ 0.60 ≈ 66.67%. On a $60.00 cost, that gives a $100.00 selling price and a 40.00% margin.

Markup to margin at a glance

How to use the results

Retailers often talk about markup when they set prices, while accountants and lenders look at gross margin, the share of each sales dollar left after the cost of goods sold. Make sure you know which one a supplier, partner or benchmark is quoting: a “50%” target means a very different price depending on the base.

Gross margin is not net profit. Your margin has to cover operating expenses before anything is left over, so a price that looks profitable per unit can still lose money once overhead is included. If you enter a selling price below cost, the profit, markup and margin appear as negative numbers.