Markup Calculator
Solve for price, markup %, or a target margin — with instant markup-to-margin conversion
Markup Calculator
Inputs
Results
| Markup | Price | Margin |
|---|---|---|
| 10% | $44.00 | 9.1% |
| 20% | $48.00 | 16.7% |
| 25% | $50.00 | 20.0% |
| 30% | $52.00 | 23.1% |
| 40% | $56.00 | 28.6% |
| 50% | $60.00 | 33.3% |
| 75% | $70.00 | 42.9% |
| 100% | $80.00 | 50.0% |
| 150% | $100.00 | 60.0% |
| 200% | $120.00 | 66.7% |
Based on your results — what to do next:
Does this survive overhead?
33.3% gross margin is before rent, payroll, and ads — see what actually lands as net profit.
How many units to break even?
At $20.00 contribution per unit, find the volume that covers your fixed costs.
What is the business worth?
$20,000.00 in gross profit feeds directly into your EBITDA multiple and sale price.
Markup is the percentage added to an item's cost to set its selling price: an item costing $40 sold at $60 carries a 50% markup. Margin measures the same $20 profit against the selling price instead — only 33.3%. That gap is the most expensive misunderstanding in small business pricing. This calculator works in all three directions: give it a markup and it returns the price, give it a price and it returns both percentages, or give it a target margin and it tells you the markup required to hit it.
How Markup Is Calculated
Markup and margin both start from the same profit figure — selling price minus cost — but divide it by different denominators. Getting the denominator right is the entire game.
| Variable | Definition |
|---|---|
| Cost | Cost of goods sold — materials, landed freight, and direct labor for one unit |
| Price | The selling price charged to the customer |
| Markup % | Profit as a percentage of cost — always the larger of the two figures |
| Margin % | Profit as a percentage of price — capped at 100%, unlike markup |
Worked example: a product costs $40. Applying a 50% markup gives a price of $40 × 1.50 = $60. Profit is $20. Markup = 20 ÷ 40 = 50%. Margin = 20 ÷ 60 = 33.3%. Now reverse it: if you need a 50% margin on that same $40 item, the price must be $40 ÷ (1 − 0.50) = $80 — a 100% markup, not 50%. Pricing at $60 while believing you have a 50% margin leaves $20 per unit on the table.
The conversion formulas are Margin = Markup ÷ (1 + Markup) and Markup = Margin ÷ (1 − Margin). Useful anchors: 25% markup = 20% margin, 50% markup = 33.3% margin, 100% markup (keystone) = 50% margin, and 300% markup = 75% margin.
💡 Expert Pro-Tip
Never Discount by the Same Percentage You Marked Up: If you mark up 50% and then run a "50% off" promotion, you are not at break-even — you are selling below cost. The $40 item marked up to $60 and discounted 50% sells for $30, a $10 loss per unit before overhead. Work out the floor first: at a 33.3% margin, a 20% discount wipes out roughly 60% of your gross profit, and anything past a 33% discount is underwater. Before approving any promotion, run the discounted price back through this calculator as a new selling price and confirm the resulting margin still clears your operating expense ratio.
Markup Calculator FAQ
Is markup the same as profit margin?
No. They describe the same dollar profit against different bases. Markup is profit divided by cost; margin is profit divided by price. Markup is always the larger percentage and can exceed 100%; margin never can. Suppliers and buyers usually talk in markup, while accountants, investors, and P&L statements use margin — so the two numbers get mixed up constantly in the same conversation.
What is keystone pricing?
Keystone pricing means doubling the wholesale cost — a 100% markup, which produces a 50% gross margin. It has been the retail default for a century because it is easy math and generally leaves enough gross profit to cover rent, staff, and shrinkage. Many retailers now use keystone as a floor rather than a rule, marking up higher on low-cost impulse items and lower on big-ticket comparison-shopped goods.
What markup do different industries use?
Typical ranges: groceries and commodity goods 10–25%, general retail 50–100%, apparel 100–350%, restaurant food 200–300% (beverages far higher), construction and trades 15–35% on materials plus a separate labor rate, and software or digital products 500%+ because marginal cost is near zero. Treat these as sanity checks, not targets — your correct markup is whatever covers your specific overhead with acceptable net profit left over.
Should markup include shipping and payment processing?
Include anything that scales per unit in your cost figure: landed freight, duties, packaging, and payment processing fees (typically 2.9% + $0.30). Ecommerce sellers who omit processing and shipping routinely discover their "40% margin" is closer to 28%. Fixed costs like rent and salaries stay out of the cost input — they are covered by the gross profit the markup generates.
How do I go from a target margin back to a price?
Price = Cost ÷ (1 − Target Margin). Never multiply cost by (1 + margin) — that is the error that costs businesses the most money. Switch the calculator above to "I want a target margin" mode and it does the correct division for you, then shows the equivalent markup so you can communicate it to suppliers in their language.
Why is my gross margin healthy but my business unprofitable?
Gross margin only covers COGS. Everything else — rent, payroll, software, advertising, insurance — comes out of that gross profit. A 35% gross margin with a 33% operating expense ratio nets 2%. Run your gross profit through the profit margin calculator to see what actually survives to the bottom line.