Markup Calculator

Calculate selling price and markup percentage from cost and desired profit, or reverse-calculate cost from price and markup. Essential for pricing strategy.

Cost Price

Markup Percentage (%)

Results

Enter values and click Calculate to see results

How to Use This Markup Calculator

Enter your cost price

Input the amount you paid for the product or service. This is your base cost before any markup.

Set your desired markup percentage

Enter the percentage you want to add to your cost. A 50% markup on a $100 item adds $50.

Click Calculate to see your pricing

The calculator shows your selling price, the markup amount in dollars, and your actual profit margin percentage.

Common Markup Percentages by Industry

Industry	Typical Markup	Profit Margin
Grocery/Food	20-30%	17-23%
Restaurants	300-400%	75-80%
Clothing/Retail	50-100%	33-50%
Electronics	10-30%	9-23%
Automotive Parts	40-60%	29-38%
Pharmaceuticals	200-500%	67-83%
Jewelry	100-300%	50-75%

Note: Actual markups vary based on competition, location, and business model. These are general industry averages.

Understanding Markup vs Profit Margin

What Is Markup?

Markup is the percentage added to your cost to determine the selling price. It's calculated based on cost. If you buy something for $100 and add a 50% markup, you sell it for $150. The $50 difference is your gross profit.

What Is Profit Margin?

Profit margin is the percentage of the selling price that is profit. It's calculated based on the selling price, not the cost. Using the same example: $50 profit on a $150 sale equals a 33.3% profit margin, not 50%.

Why the Difference Matters

Many business owners confuse markup and margin. A 50% markup does not equal a 50% profit margin. To achieve a 50% profit margin, you need a 100% markup. Understanding this distinction helps you price products correctly to hit your profit targets.

The Formulas

Selling Price = Cost × (1 + Markup%)

Markup Amount = Cost × Markup%

Profit Margin = (Markup Amount / Selling Price) × 100

Pricing Tips for Small Businesses

Know all your costs

Include shipping, storage, payment processing fees, and your time. Many businesses underprice because they miss hidden costs.

Research competitor pricing

Know what others charge for similar products. You can price higher if you offer better quality or service, but be prepared to justify it.

Consider psychological pricing

Prices ending in 9 or 99 often sell better than round numbers. $19.99 feels significantly cheaper than $20 to many customers.

Review and adjust regularly

Costs change over time. Review your pricing quarterly and adjust markups to maintain your target profit margins.

Frequently Asked Questions

How do I calculate selling price from cost and markup?

Multiply your cost by (1 + markup percentage as a decimal). For a $50 item with 40% markup: $50 × 1.40 = $70 selling price. The markup amount is $70 - $50 = $20.

What's a good markup percentage?

It depends on your industry and costs. Retail typically uses 50-100% markup. Restaurants often use 300%+ on food. Service businesses may use lower markups but higher volume. Calculate based on your overhead and profit goals.

Is markup the same as profit margin?

No. Markup is based on cost; margin is based on selling price. A 50% markup gives you a 33% profit margin. To get a 50% profit margin, you need a 100% markup. This calculator shows both values.

How do I calculate markup if I know cost and selling price?

Subtract cost from selling price to get the markup amount. Divide by cost and multiply by 100. Example: Cost $80, sell for $120. Markup = ($120 - $80) / $80 × 100 = 50%.

Should I include taxes in my markup calculation?

No. Sales tax is added on top of the selling price and remitted to the government. Calculate your markup on your actual product cost. Sales tax is a pass-through cost, not part of your pricing strategy.

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