Free markup calculator. Determine the right selling price from your cost basis and desired markup percentage. Includes margin vs markup comparison, cost-based pricing tables, and visual charts for wholesale and retail pricing decisions.
Select your calculation mode: "Cost to Selling Price" to calculate the final price from your cost and desired markup, or "Selling Price to Cost" to reverse-calculate the cost from a known price and markup.
Enter the cost price — this is the amount you pay to produce or purchase the product, including materials, direct labor, and manufacturing overhead.
Enter your desired markup percentage. This is the percentage added ON TOP of your cost to determine the selling price. For example, a 50% markup on a $100 cost gives a $150 selling price.
Click "Calculate" to see your selling price, gross profit per unit, and the equivalent gross margin percentage.
Use the quick reference table below the results to compare common markup rates and their corresponding margin percentages.
Markup is the amount added to the cost price of a product to arrive at the selling price. It is always expressed as a percentage of the cost, not the selling price. For example, if a product costs $40 and you apply a 50% markup, the selling price is $40 × (1 + 0.50) = $60. Your gross profit per unit is $20. The equivalent gross margin is 33.3% ($20 / $60). This distinction from margin is crucial: markup is calculated on cost, while margin is calculated on revenue. As markup increases, the gap between markup % and margin % grows wider. A 100% markup equals a 50% margin, and a 300% markup equals a 75% margin.
A clothing retailer purchases a shirt for $25 and applies a 60% markup. Selling Price = $25 × 1.60 = $40. Gross Profit = $40 - $25 = $15 per shirt. Gross Margin = ($15 / $40) × 100 = 37.5%. Note that while the markup is 60%, the margin is only 37.5% because margin is calculated on the higher selling price.
An electronics retailer buys a speaker at wholesale for $200 and applies a 25% markup. Selling Price = $200 × 1.25 = $250. Gross Profit = $50 per unit. Gross Margin = ($50 / $250) × 100 = 20%. The 25% markup translates to a 20% gross margin, leaving room for operating expenses but requiring volume to cover fixed costs.
A restaurant's food cost for a pasta dish is $8 (ingredients only). The restaurant applies a 300% markup to cover labor, rent, and other expenses. Selling Price = $8 × 4.00 = $32. Gross Profit = $24 per dish. Gross Margin = ($24 / $32) × 100 = 75%. While this seems high, restaurants typically have high operating expenses (rent, labor, utilities) that consume most of this gross profit.
Find answers to the most common questions about markup calculator.
Markup is the difference between the selling price of a product and its cost, expressed as a percentage of the cost. It represents how much you add to the cost to determine your selling price. For example, if a product costs $50 and you sell it for $75, the markup is ($75 - $50) / $50 × 100 = 50%. Markup is used by businesses to ensure they cover costs and make a profit. It is one of the simplest and most common pricing strategies, particularly in retail, wholesale, and manufacturing.
The key difference lies in the base used for calculation. Markup is calculated on the cost price: (Selling Price - Cost) / Cost × 100%. Margin is calculated on the selling price: (Selling Price - Cost) / Selling Price × 100%. For a product costing $60 and selling for $100: Markup = ($100 - $60) / $60 = 66.7%. Margin = ($100 - $60) / $100 = 40%. The markup percentage is always higher than the margin percentage. This difference is important when setting prices — using markup when you mean margin (or vice versa) can lead to significantly different pricing outcomes and profit levels.
Markup rates vary widely by industry. Grocery stores typically use 15-25% markup on most items. Clothing retail applies 50-100% markup. Electronics retail uses 20-40% markup. Restaurants use 200-400% markup on food and 300-500% on beverages (to account for high operating costs). Jewelry often has 50-300% markup. Furniture stores use 40-100% markup. Pharmaceuticals can have 200-5,000% markup on generic drugs. Construction contractors typically use 10-20% markup. Understanding your industry's standard markup helps you set competitive yet profitable prices.
The right markup depends on several factors: (1) Industry standards — research what competitors charge and what margins they operate on. (2) Your cost structure — include all direct costs (materials, labor, shipping) plus a share of indirect costs (rent, marketing, admin). (3) Perceived value — premium or unique products can command higher markups. (4) Volume goals — lower markups can drive higher sales volume. (5) Target profit — work backward from your desired net profit to determine the required markup. Many businesses start with their industry's average markup and adjust based on their unique costs, competitive position, and profit goals.
Keystone pricing is a retail pricing strategy where the selling price is exactly double the cost — a 100% markup (which equals a 50% gross margin). The term comes from the idea that this markup is the "keystone" of retail pricing. For example, a product purchased at wholesale for $50 would be sold for $100. This strategy is common in retail, especially for apparel, accessories, gift items, and home goods. Many retailers consider keystone pricing their baseline and may adjust up or down based on demand, competition, and brand positioning. While simple, it doesn't account for varying cost structures across different product categories.
Cost-plus pricing (also called markup pricing) is a strategy where you add a fixed markup percentage to the total cost of producing a product. The formula is: Selling Price = Total Cost × (1 + Markup%). It is the simplest pricing method and ensures every unit sold is profitable. However, it has limitations: it doesn't consider competitor pricing, customer willingness to pay, or perceived value. Cost-plus works best for custom orders, government contracts, commodities, and industries where costs are relatively stable. For consumer-facing businesses, value-based pricing (setting prices based on what customers are willing to pay) often leads to higher profits than pure cost-plus pricing.
