Markup Calculator

Calculate your selling price and profit. Convert between markup vs. margin to ensure your pricing strategy covers costs and maximizes revenue.
Enter any two values to calculate the rest

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Markup Calculator

Markup Calculator

Markup is the simple percentage you add to cost to arrive at a selling price. It expresses profit relative to the cost of the item or service: profit ÷ cost. This calculator is designed so you can enter any two values (cost, markup %, revenue / selling price, or profit) and it will compute the other two instantly. Use it to price products, set service rates, or check whether a proposed sale meets your profitability targets.

Definitions

• Cost: what you pay to buy, produce or deliver the product/service (COGS).
• Revenue / Selling price: what you charge the customer.
• Profit: revenue minus cost.
• Markup (%): (profit ÷ cost) × 100.

Core formulas you’ll rely on:

• markup = 100 × (revenue − cost) / cost
• revenue = cost + (cost × markup / 100)
• profit = revenue − cost

These are the exact relationships used by the calculator so you can enter any two fields and compute the rest automatically.

Practical examples

  1. You paid $40 and want a 25% markup: selling price = 40 + (40 × 0.25) = $50; profit = $10.
  2. You want to sell at $100 and need to know markup over a $75 cost: markup = 100 × (100 − 75) ÷ 75 = 33.33%.
  3. You have revenue $200 and profit target $50: cost = revenue − profit = $150; markup = 100 × 50 ÷ 150 = 33.33%.

When to use markup vs margin

Markup and margin are easily confused but they answer different questions. Markup measures profit relative to cost; margin measures profit relative to selling price (profit ÷ revenue). A 25% markup on cost does not equal a 25% profit margin always check which metric you need for reporting, pricing or negotiation. Use markup when building prices from costs; use margin when comparing profitability against sales.

How businesses choose a markup

Many companies start with cost-plus pricing: they set price = cost × (1 + markup). It’s simple and widely used, particularly in retail and services. However, cost-plus ignores demand, competition and value perception; you should adjust markup for seasonality, inventory turnover, and customer sensitivity. Low-priced or commodity items often carry higher percentage markups, while high-ticket items typically have lower percentage markups but larger absolute profit per sale.

Industry patterns

• Retail: markups vary widely by category. Fast-moving staples often have lower markups than specialty goods.
• Restaurants & food service: food items commonly use higher markups on low-cost ingredients and lower markup on expensive items.
• Professional services: rate-setting usually starts with hourly cost plus overhead and desired margin.

Common mistakes to avoid

• Mixing up markup and margin.
• Ignoring fixed costs and overhead.
• Using a single static markup for all products.
• Forgetting taxes, VAT or shipping.

How to use this calculator

  1. Identify two known inputs: cost, markup, revenue, or profit.
  2. Enter them into the calculator fields. The other two fields populate automatically.

FAQs

Q1. Does a 50% markup give me a 50% profit?

A: No. A 50% markup on cost means profit is half of cost. Profit margin equals profit divided by selling price, which will be smaller than 50% in this case.

Q2. Can I set markup to zero?

A: You can, but that produces a zero profit result, useful only for break-even scenarios or promotions.

Q3. Why is markup sometimes negative?

A: A negative markup happens when you sell below cost (loss). It’s rare for normal pricing but can occur during clearance or errors.

Q4. Should I always use the same markup for everything?

A: No, best practice is to vary markup by product category, inventory velocity, and strategic goals.

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