Markup Calculator – Calculate Markup Percentage
Calculate markup percentage and selling price from cost
Table of Contents
How to Use
- Choose calculation mode: from prices or from markup percentage
- Enter the cost of your product or service
- Enter selling price or desired markup percentage
- Click calculate to see your markup analysis
What is Markup?
Markup is the amount added to the cost of a product to determine its selling price. It's expressed as a percentage of the cost and represents the gross profit on a sale before accounting for overhead and other expenses.
The markup formula is: Markup % = ((Selling Price - Cost) / Cost) × 100. For example, if a product costs $80 and sells for $100, the markup is ($100 - $80) / $80 × 100 = 25%.
Markup vs Profit Margin
While often confused, markup and margin are different calculations:
- Markup: Percentage of COST added to determine price. Formula: (Price - Cost) / Cost
- Margin: Percentage of PRICE that is profit. Formula: (Price - Cost) / Price
- A 100% markup equals a 50% margin
- A 50% markup equals a 33.3% margin
- Markup is always higher than margin for the same transaction
Markup Calculation Formulas
| Calculation | Formula | Example |
|---|---|---|
| Markup % | (Selling Price - Cost) / Cost × 100 | ($150 - $100) / $100 = 50% |
| Selling Price | Cost × (1 + Markup%) | $100 × 1.50 = $150 |
| Cost from Price | Selling Price / (1 + Markup%) | $150 / 1.50 = $100 |
| Markup Amount | Cost × Markup% | $100 × 0.50 = $50 |
Common Markup Percentages by Industry
- Grocery stores: 5-25% markup
- Clothing retail: 50-100% markup
- Restaurants: 200-400% markup on food
- Jewelry: 100-300% markup
- Electronics: 10-30% markup
- Furniture: 50-100% markup
- Auto parts: 30-50% markup
Frequently Asked Questions
- What is a good markup percentage?
- A good markup depends on your industry, competition, and overhead costs. Retail typically uses 50-100% markup, while grocery uses 5-25%. The key is ensuring your markup covers all costs and provides adequate profit.
- How do I convert markup to margin?
- To convert markup to margin: Margin = Markup / (1 + Markup). For example, a 50% markup (0.50) equals 0.50 / 1.50 = 33.3% margin. Conversely, Markup = Margin / (1 - Margin).
- Why is markup higher than margin?
- Markup is always higher because it's calculated on the smaller number (cost), while margin is calculated on the larger number (selling price). The same dollar profit appears as a larger percentage when divided by cost.
- Should I use markup or margin for pricing?
- Use markup when you want to add a consistent percentage to your costs. Use margin when you have target profit percentages based on revenue. Many businesses use markup for simplicity but track margin for financial analysis.