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Markup Calculator
A markup calculator turns a product's cost and your markup into a selling price. Enter what the item costs you and the markup percentage you want to add, and it works out the selling price, your profit on each sale, and your profit margin — so you can price with confidence instead of guessing.
Markup adds a % of the cost; margin keeps a % of the selling price as profit.
| Cost | |
| Profit per item | |
| Profit margin | |
| Markup | |
| Markup amount |
How it works
Markup is the amount you add to the cost of a product to set its selling price. If an item costs you $40 and you add a 25% markup, you add $10 and sell it for $50. Markup is how most shops, sellers, and small businesses set prices: start with what the item costs, add enough to cover your other costs and leave a profit, and check that the result is a price customers will still pay.
Your cost is what you pay for one item — the wholesale price, materials, or the cost of making it. The markup percentage is the extra you add, as a percentage of that cost. The calculator multiplies the cost by one plus the markup to find the selling price, and the difference between price and cost is your profit on each item.
The formulas are:
Profit = Selling price − Cost
Profit margin = Profit ÷ Selling price × 100
Margin on price: Selling price = Cost ÷ (1 − margin %), and the markup that gives it is Profit ÷ Cost × 100.
Markup and margin are not the same number, and mixing them up is the most common pricing mistake. Markup is a percentage of cost, while margin is a percentage of the selling price — so a 25% markup gives only a 20% margin, because the $10 profit is 20% of the $50 price, not 25%. Margin is always lower than markup for the same sale. If your target is a margin — say you want to keep 30% of every sale as profit — you need a higher markup to get there. Also remember that the profit here is gross profit before rent, wages, fees, and tax; your real profit after those costs will be smaller.
Worked example
A shop buys a gadget for $40 and wants a 25% markup. What should it sell for?
The markup amount is $40 × 0.25 = $10. The selling price is $40 + $10 = $50, or directly $40 × 1.25 = $50.
The profit on each sale is $50 − $40 = $10. The profit margin is $10 ÷ $50 × 100 = 20%. So a 25% markup produces a 20% margin — the two numbers differ because markup is measured against the $40 cost while margin is measured against the $50 price. If the shop sells 100 gadgets a month at that price, the gross profit is 100 × $10 = $1,000 a month, before other costs.
FAQ
What is the difference between markup and margin?
Markup is a percentage of cost, while margin is a percentage of selling price. A 25% markup on a $40 item gives a $50 price and a 20% margin, because the $10 profit is 20% of the $50 price.
How do I calculate markup percentage?
Divide the profit by the cost and multiply by 100. If an item costs $40 and sells for $50, the markup is ($50 − $40) ÷ $40 × 100 = 25%.
What markup should I use?
It depends on your industry, your other costs, and what customers will pay. Many retailers use 25% to 50% markup, but some products need far more and some far less. Check what similar sellers charge before you set your price.
Is profit the same as markup?
No. Markup is the amount added to cost, which equals the gross profit on one item in dollars. Margin is that same profit expressed as a percentage of the selling price.
Does this calculator include tax or fees?
No. The profit shown is gross profit before rent, wages, payment fees, and tax. Your profit after those costs will be lower.
How do I price for a target profit margin?
Switch the calculator to margin on price and enter the margin you want. To keep 30% of a $40 item as profit, the price is $40 divided by 0.70, which is $57.14 — a 42.86% markup. A 30% margin always needs a higher markup than 30%.