Markup Percentage Calculator

Markup percentage is the amount added to the cost price of a product to determine its selling price, expressed as a percentage of the cost. For example, if a product costs $100 and you apply a 50% markup, the selling price becomes $150. Markup is calculated as: (Selling Price − Cost) ÷ Cost × 100. It's one of the most important pricing metrics for retailers, wholesalers, and manufacturers.

This is one of the most common pricing confusions. Markup is the percentage added to the cost to arrive at the selling price. Margin (profit margin) is the percentage of the selling price that is profit. A 50% markup on a $100 item yields a $150 selling price — but the margin is only 33.33% ($50 profit ÷ $150 selling price). Markup is always a larger number than margin for the same transaction. Understanding this distinction is critical for accurate pricing and financial reporting.

To calculate markup percentage: Subtract the cost from the selling price, divide by the cost, then multiply by 100. Formula: Markup % = ((Selling Price − Cost) ÷ Cost) × 100. For example, if you buy an item for $40 and sell it for $70, the markup is (($70 − $40) ÷ $40) × 100 = 75%. You can use the calculator above to compute this instantly — just enter your cost and selling price in the first panel.

Typical retail markup percentages vary by industry. General retail often uses 50%–100% markup (keystone pricing at 100% is common). Grocery stores typically operate on 15%–30% markup due to high volume. Jewelry and luxury goods may use 100%–300% markup. Restaurants often target 200%–400% markup on menu items to cover overhead. The "right" markup depends on your costs, competition, target market, and overall business strategy. Always consider both your fixed and variable costs when setting markup.

Markup directly impacts your profitability, competitiveness, and cash flow. Setting the right markup ensures you cover all costs (including overhead, shipping, and marketing) while remaining attractive to customers. Underestimating markup can lead to losses, while overestimating can drive customers to competitors. Using a markup calculator helps you make data-driven pricing decisions and quickly test different scenarios before committing to a price point.

To convert markup to margin: Margin = Markup ÷ (1 + Markup), where both are in decimal form. Example: 50% markup = 0.50 ÷ 1.50 = 0.3333 = 33.33% margin.
To convert margin to markup: Markup = Margin ÷ (1 − Margin). Example: 30% margin = 0.30 ÷ 0.70 = 0.4286 = 42.86% markup.
The quick reference table above shows common conversions at a glance. Bookmark this page for easy access whenever you need to convert between these two key metrics.

Absolutely. While markup is traditionally associated with physical products, service businesses can use the same principles. Consider the "cost" as your labor rate, materials, and overhead per service unit, then apply markup to determine your service price. For example, if your cost per hour of service is $60 (including wages and overhead), and you want a 40% markup, your billable rate would be $84 per hour. The calculator works the same way — just treat your service cost as the "cost price."

Keystone pricing is a traditional retail pricing method where the selling price is set at double the wholesale cost — equivalent to a 100% markup. For a product that costs $50 wholesale, keystone pricing sets the retail price at $100 (100% markup, 50% margin). While simple and easy to implement, keystone pricing may not be suitable for all products. High-volume, low-margin items or highly competitive markets may require different strategies. Always test your pricing against market conditions.

Not necessarily. While a higher markup means more profit per unit sold, it may reduce total sales volume if prices become uncompetitive. The optimal markup balances profitability per unit with total units sold. Sometimes a lower markup with higher volume yields greater total profit. This is known as the price elasticity of demand. Use this calculator to model different markup scenarios, then test in your market to find the sweet spot that maximizes overall revenue and profit.