Markup Calculator
Calculate markup percentage and selling price based on cost. Convert between markup and margin for optimal pricing.
Calculate Selling Price
Pricing Analysis
Markup vs Margin
Markup
Based on cost: (Selling Price - Cost) ÷ Cost
$50 cost + 50% markup = $75 price
Margin
Based on price: (Selling Price - Cost) ÷ Selling Price
$75 price = 33.3% margin on $50 cost
Common Markup Percentages
| Industry | Typical Markup | Resulting Margin |
|---|---|---|
| Retail (general) | 50% | 33% |
| Clothing | 100% | 50% |
| Jewelry | 100-200% | 50-67% |
| Furniture | 40-60% | 29-38% |
| Electronics | 10-20% | 9-17% |
| Groceries | 15-20% | 13-17% |
Markup Formulas
- Selling Price: Cost × (1 + Markup%)
- Markup%: (Selling Price - Cost) ÷ Cost × 100
- Margin%: (Selling Price - Cost) ÷ Selling Price × 100
- Convert Markup to Margin: Markup ÷ (1 + Markup)
- Convert Margin to Markup: Margin ÷ (1 - Margin)
Pricing Strategy Tips
- Research competitor pricing
- Consider perceived value, not just cost
- Factor in all costs (overhead, marketing)
- Test different price points
- Use psychological pricing ($99 vs $100)
About the Markup Calculator
Markup is the percentage added to cost to get the selling price. Margin is the percentage of selling price that's profit. They are not the same — a 50% markup is a 33% margin. This page covers both, the formulas, and the pricing strategy implications.
The Formula
Markup % = (Price − Cost) ÷ Cost × 100. Margin % = (Price − Cost) ÷ Price × 100. Price from cost and markup: Price = Cost × (1 + Markup%). Price from cost and target margin: Price = Cost ÷ (1 − Margin%).
Worked Example
Cost $50. Markup 100% → Price $100. Margin on $100 sale: $50 profit ÷ $100 = 50%. Markup 50% → Price $75. Margin: $25/$75 = 33%.
Markup vs margin — the source of pricing errors
Quoting '50% markup' and '50% margin' aren't the same. Many new business owners price to 'get a 50% markup' thinking they'll have a 50% margin — they actually get 33%. Always clarify which one you mean.
Industry-typical markups
Grocery: 10-15%. Restaurant food: 200-300% on cost. Jewelry: 100-300%. Clothing retail: 50-100%. Auto dealers (new cars): 4-8%. Furniture: 200-400%. Wide variation by sector and brand.
Discount pricing math
A 'buy one get one 50% off' is 25% off the total — not 50%. Math gets confusing fast. Always calculate the effective discount when comparing offers.
Common Mistakes
- Confusing markup and margin. Causes systematic underpricing.
- Pricing without including overhead (rent, utilities, labour) in cost. The 'cost' should be fully-loaded.
- Discounting too aggressively. A 25% off sale requires selling 33% more units to recover the same gross margin dollars.
Frequently Asked Questions
What's a 'good' margin?
Highly variable. Grocery 1-3%, software 70-90%, restaurants 5-15% net. Compare to your industry.
Is margin the same as profit?
Gross margin is revenue minus direct cost. Net profit is after all expenses including overhead.
This calculator is for informational purposes only and does not constitute financial, tax, or legal advice. Consult a licensed professional before making significant financial decisions.