Markup Calculator
Calculate markup percentage from cost and selling price, or find the selling price from cost and desired markup. See also Margin Calculator and Discount Calculator.
How to Calculate Markup
Markup is the percentage added to the cost price to determine the selling price. It represents how much more than the cost you charge. For example, if an item costs $50 and you sell it for $75, the markup is 50% because you added $25 (50% of $50) to the cost. Markup is calculated based on cost, which distinguishes it from margin (calculated based on selling price). Understanding markup is essential for pricing products profitably.
Markup Formula
Markup % = ((Selling Price − Cost) / Cost) × 100
To find selling price from markup:
Selling Price = Cost × (1 + Markup% / 100)
Relationship to margin:
Margin % = Markup% / (100 + Markup%) × 100
Example Calculation
Cost Price: $50.00
Selling Price: $75.00
Markup = (75 − 50) / 50 × 100 = 50%
Profit = $75 − $50 = $25.00
Margin = 25 / 75 × 100 = 33.33%
Markup vs Margin Reference Table
| Cost | Markup % | Selling Price | Profit | Margin % |
|---|---|---|---|---|
| $50 | 10% | $55.00 | $5.00 | 9.09% |
| $50 | 25% | $62.50 | $12.50 | 20.00% |
| $50 | 50% | $75.00 | $25.00 | 33.33% |
| $50 | 75% | $87.50 | $37.50 | 42.86% |
| $50 | 100% | $100.00 | $50.00 | 50.00% |
| $50 | 150% | $125.00 | $75.00 | 60.00% |
| $50 | 200% | $150.00 | $100.00 | 66.67% |
Frequently Asked Questions
What is the difference between markup and margin?
Markup is calculated as a percentage of cost, while margin is calculated as a percentage of selling price. A 50% markup on a $50 item gives a $75 selling price, but the margin is only 33.33%. Markup is always higher than margin for the same transaction.
What is a typical markup for retail?
Retail markups vary widely by industry. Grocery stores typically use 25-50% markup, clothing 100-300%, jewelry 100-400%, and restaurants 200-400% on food items. The appropriate markup depends on overhead costs, competition, and perceived value.
How do I convert markup to margin?
To convert markup to margin: Margin = Markup / (1 + Markup). For example, a 50% markup (0.50) gives a margin of 0.50 / 1.50 = 33.33%. To convert margin to markup: Markup = Margin / (1 − Margin).
Can markup be over 100%?
Yes. A 100% markup means the selling price is double the cost. A 200% markup means the selling price is triple the cost. Many industries regularly use markups well over 100%, especially luxury goods, software, and services.
Solved Examples
Example 1: Retail clothing store pricing
Solution:
Cost price of a jacket = $45, Desired markup = 120%
Markup amount = Cost × Markup% = $45 × 1.20 = $54
Selling price = Cost + Markup = $45 + $54 = $99
Answer: Sell the jacket at $99 for a 120% markup ($54 profit per unit).
Example 2: Finding markup percentage from cost and selling price
Solution:
Cost = $28, Selling price = $49.99
Markup = (Selling Price - Cost) / Cost × 100
Markup = ($49.99 - $28) / $28 × 100 = $21.99 / $28 × 100
Markup = 78.5%
Answer: The markup is 78.5% on cost.
Example 3: Restaurant food cost markup
Solution:
Food cost per plate = $6.50, Industry standard markup = 300%
Markup amount = $6.50 × 3.00 = $19.50
Menu price = $6.50 + $19.50 = $26.00
This gives a food cost percentage of $6.50/$26.00 = 25% (industry target)
Answer: Menu price = $26.00 (300% markup achieves the standard 25% food cost ratio).
Practice Questions
Try these on your own:
- A product costs $12.50 to make. What is the selling price with a 60% markup? (Answer: $20.00)
- You buy wholesale at $75 and sell at $150. What is your markup percentage? (Answer: 100%)
- A 50% markup on a $200 cost item — what is the selling price and profit margin? (Answer: Price = $300, Margin = 33.3%)
- If a retailer wants a 40% margin, what markup percentage should they apply? (Answer: 66.7%)
- Electronics cost $350, sold at $525. What is the markup percentage? (Answer: 50%)
- A bakery spends $2.80 per cupcake. At a 250% markup, what's the selling price? (Answer: $9.80)
Common Mistakes to Avoid
The most critical mistake is confusing markup with margin. Markup is calculated on cost (what you paid), while margin is calculated on selling price (what the customer pays). A 100% markup equals a 50% margin — they are NOT the same number. Another common error is not accounting for all costs when setting markup — you must include shipping, packaging, overhead, and labor, not just the wholesale purchase price. Business owners also frequently set markup too low to cover operating expenses, leading to sales volume that doesn't translate to profitability. Additionally, applying the same markup across all products is risky — high-volume items may need lower markup while specialty items can sustain higher markup. Finally, forgetting to consider competitor pricing can result in overpriced products that don't sell.
Key Takeaways
- Markup % = (Selling Price - Cost) / Cost × 100. It measures profit as a percentage of cost.
- Markup and margin are different: 50% markup = 33.3% margin; 100% markup = 50% margin.
- To convert markup to margin: Margin = Markup / (1 + Markup). To convert margin to markup: Markup = Margin / (1 - Margin).
- Industry standard markups vary widely: grocery (25-50%), retail clothing (100-300%), restaurants (300%+).
- Include ALL costs (COGS + overhead + shipping) in your cost basis before applying markup.
- Keystone pricing (100% markup / 50% margin) is a common retail starting point.