How it works
Markup is the percentage added to a product's cost to arrive at its selling price — a $45 item marked up 60% sells for $72. This calculator turns cost plus markup into the full pricing picture: the selling price per unit, the profit each sale carries, the equivalent gross margin the markup produces, and the profit across a whole purchase or production batch. Markup lives on cost while margin lives on price, and the gap between the two is the most common pricing mistake in small business: a 60% markup is only a 37.5% margin, because the same profit is being measured against different bases. The consequence is real money — a business that targets 'a 50% margin' but prices with a 50% markup earns a third less than intended on everything it sells. Use the batch view before committing to orders, too: unit economics that look healthy per item often reveal thin totals once returns, payment fees and shrinkage take their share of the same profit.
Formula
Price = cost x (1 + markup/100) | Profit = price - cost | Margin = profit / price x 100
Tips
- Keystone pricing — doubling cost — is a 100% markup but only a 50% margin.
- Anchor markups to landed cost: freight, packaging and card fees belong in the base.
- Check competitor shelf prices before trusting any markup target on its own.
- A margin that ignores rent, returns and ad spend is smaller than the spreadsheet says.
- Negative markups are loss leaders — legal, common, and dangerous without a recovery plan.
Frequently asked questions
- How do I calculate markup on cost?
- Divide desired profit by cost and express as a percentage: buying at $45 and selling at $72 carries $27 of profit, a 60% markup. Multiply cost by (1 + 60%) directly for the price. The calculator shows price, profit and the margin equivalent together.
- What is a good markup percentage for retail?
- It varies enormously by category: grocery runs 15-25%, apparel commonly 50-100% (keystone or better), jewellery and cosmetics several hundred percent. The useful test is not the percentage but whether the resulting margin covers your overhead and leaves a profit at realistic volumes.
- How do you convert markup to margin?
- Margin = markup / (100% + markup). A 60% markup becomes 60/160 = 37.5% margin. Converting the other way, markup = margin / (100% - margin), so 37.5% margin is 60% markup. The calculator performs both conversions from either starting point.
- What is keystone pricing?
- Doubling the cost — a 100% markup, which equals a 50% margin. Long the default rule of thumb in apparel and gift retail, it survives because it roughly covers overhead at normal sell-through rates, though category economics decide whether keystone is generous or insufficient.
- Is a 100% markup too much?
- Almost never by itself — customers compare prices, not your cost structure. A 100% markup is a 50% margin, which must still fund rent, labour, shrinkage and marketing. If competitors charge similar prices, the markup simply reflects what the market already pays.