Markup Calculator
Set a selling price from your cost and markup — and see the profit and the true margin it produces.
Markup vs. margin
Markup = Profit ÷ Cost · Margin = Profit ÷ Selling price
Cost $40, markup 50%: price = 40 × 1.5 = $60, profit $20.
That same $20 profit is a 50% markup but only a 33% margin ($20 ÷ $60). Confusing the two is a classic pricing mistake.
Suppose you need a 40% margin to hit your business's profitability target, and your fully landed cost per unit is $25 (product plus shipping and packaging). The markup required is 40 ÷ (100 − 40) = 66.7%, not 40%.
Selling price = $25 × 1.667 = $41.67. Check: profit is $16.67, and $16.67 ÷ $41.67 = 40.0% margin — confirming the conversion. Pricing at a 40% markup instead would only yield a 28.6% margin, well short of the target.
Typical markups by industry
| Industry | Common markup |
|---|---|
| Grocery | 5%–25% |
| Restaurants (food) | 200%–300% |
| Apparel | 100%+ (keystone) |
| Jewelry | 100%–300% |
| Electronics | 5%–15% |
"Keystone" pricing simply doubles cost (100% markup = 50% margin). To price from a target margin instead of markup, use the margin calculator; to find the units you must sell to profit, the break-even calculator.
Markup-to-margin quick conversion
| Markup | Equivalent margin |
|---|---|
| 10% | 9.1% |
| 25% | 20.0% |
| 50% | 33.3% |
| 100% (keystone) | 50.0% |
| 200% | 66.7% |
| 300% | 75.0% |
Notice margin never catches up to markup, and the gap widens as both numbers grow — a 300% markup still tops out at a 75% margin, since margin approaches but never reaches 100% no matter how high the markup goes.
Common markup mistakes
- Quoting margin figures as if they were markup (or vice versa). The two numbers diverge fast — see the conversion table above — and mixing them up in a pricing spreadsheet can silently erase your intended profit.
- Using invoice cost instead of fully landed cost. Freight, packaging, payment-processing fees, and returns/shrinkage all belong in "cost" for the markup to reflect true profitability.
- Setting markup without checking the resulting margin against your break-even needs. A markup that sounds generous can still translate to a margin too thin to cover fixed overhead — cross-check with the break-even calculator.
Frequently asked questions
How do I calculate markup?
Selling price = cost × (1 + markup%). $40 at 50% markup = $60 ($20 profit).
Markup vs. margin?
Markup = profit ÷ cost; margin = profit ÷ price. 50% markup = 33% margin for the same profit.
What markup should I use?
Industry-dependent: groceries low, restaurants 200%+, apparel/jewelry 100%+.
How do I convert a target margin into the markup I need?
Markup % = Margin % ÷ (1 − Margin %). A 40% margin target needs a 66.7% markup, not 40%.
Does the cost in a markup calculation include shipping and overhead?
It should — use your fully landed cost (product plus freight, packaging, and fees), not just the invoice price, or you'll overstate your real margin.
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Note: Educational tool; real pricing must cover overhead, not just unit cost. Not financial advice. Last reviewed: September 2026.