Markup Calculator

A markup calculator helps you set profitable prices for products and services. This markup calculator shows both markup percentage and profit margin percentage, which are often confused but calculate profit differently. Use this comprehensive markup calculator to optimize pricing strategies, ensure profitability, and understand the critical difference between markup and margin.

What is Markup?

Markup is the amount added to cost to determine selling price. The formula is: Markup % = (Profit ÷ Cost) × 100. For example, a $60 cost with $30 profit = 50% markup ($30 ÷ $60). Markup is based on cost (what you paid) and can exceed 100% - you can double, triple, or more your cost. This markup calculator uses this formula to help you price products correctly.

What is Margin?

Margin is profit as a percentage of selling price. The formula is: Margin % = (Profit ÷ Selling Price) × 100. For example, a $90 selling price with $30 profit = 33.3% margin ($30 ÷ $90). Margin is based on selling price (what customer pays) and can never reach 100% - that would require infinite markup. Use this markup calculator to see both metrics simultaneously.

Why the Difference Matters

Using markup when you mean margin leads to underpricing. A 50% markup is only 33% margin - that's a major difference! Most accounting software reports margin, not markup, which causes confusion. Many business owners think they have 50% margins when they actually have 50% markup (33% margin). This markup calculator helps you avoid this costly mistake by showing both calculations.

Industry Standard Markups

Different industries use different markup standards:

• Grocery stores: 15-25% markup (13-20% margin)
• Retail clothing: 50-100% markup (33-50% margin)
• Restaurants: 200-400% markup on food (67-80% margin)
• Jewelry: 100-300% markup (50-75% margin)
• Pharmaceuticals: 20-25% markup (17-20% margin)
• Furniture: 40-100% markup (29-50% margin)
• Electronics: 10-30% markup (9-23% margin)
• Services/Labor: 50-100% markup (33-50% margin)

Using This Markup Calculator for Pricing

Follow these steps to price products effectively:

1. Know Your True Costs: Include materials, labor, overhead, shipping
2. Research Competition: Check competitor pricing in your market
3. Calculate Required Markup: Ensure markup covers all expenses plus profit
4. Consider Perceived Value: Higher quality/brand can support higher markup
5. Test Price Points: Use calculator to model different pricing scenarios
6. Monitor Margins: Track actual margins vs planned using this calculator

Common Pricing Mistakes

Avoid these common errors when using a markup calculator:

• Confusing markup with margin (using 50% when you mean 33% profit)
• Not including all costs in base cost calculation
• Copying competitor prices without checking your costs
• Pricing based only on gut feeling, not calculations
• Forgetting to update prices when costs increase
• Using the same markup for all products regardless of cost

Markup Calculator Formulas

Calculate Selling Price from Markup:
Selling Price = Cost × (1 + Markup% ÷ 100)
Example: $100 cost × (1 + 50% ÷ 100) = $150

Calculate Markup from Prices:
Markup% = ((Selling Price - Cost) ÷ Cost) × 100
Example: (($150 - $100) ÷ $100) × 100 = 50%

Convert Markup to Margin:
Margin% = (Markup% ÷ (100 + Markup%)) × 100
Example: (50 ÷ (100 + 50)) × 100 = 33.3%

Convert Margin to Markup:
Markup% = (Margin% ÷ (100 - Margin%)) × 100
Example: (33.3 ÷ (100 - 33.3)) × 100 = 50%