Markup Calculator

What does a markup calculator do?

A markup calculator multiplies a cost by one plus the markup percentage to give a selling price, shows the profit that price contains, and converts the markup into the margin it implies. Markup % = (Price − Cost) ÷ Cost × 100, with cost in the denominator — the one thing that separates it from margin.

It runs in reverse too: enter a price and a cost to get the markup percentage, or a price and a stated markup to recover the cost.

At the page defaults a $60 cost with a 50 % markup sells for $90. The profit is $30, which is 50 % of the cost and 33.33 % of the price.

How do you calculate markup percentage?

Divide the profit by the cost and multiply by 100: a $150 price on a $100 cost is (150 − 100) ÷ 100 × 100 = 50 %. To go the other way, from cost and markup to price, Price = Cost × (1 + Markup % ÷ 100): a $60 item at 100 % markup sells for $120.

A $5 ingredient at 300 % becomes a $20 dish. The buyer's direction, cost from price and markup, is Cost = Price ÷ (1 + Markup % ÷ 100), so a $150 price with a claimed 50 % markup implies a $100 cost.

Each direction is a tab on the calculator. The margin shown beside every result is the exact conversion, margin % = markup % ÷ (100 + markup %) × 100.

What is the difference between markup and margin?

Because cost is smaller than price whenever there is a profit, markup is always the larger number. A 25 % markup is a 20 % margin; 50 % is 33.33 %; 100 % is 50 %; 300 % is 75 %.

The gap widens as the markup grows, which the bar chart under the calculator shows: each bar is the price, split into the cost share and the profit share, and the profit share is the margin.

Use markup to set a price from a known cost, because it is a single multiplication. Use margin to compare products or periods, because it is measured against a consistent revenue base. The profit margin calculator is the same engine with revenue as the base and the full gross-to-net ladder.

What is a keystone markup?

Keystone is the retail trade's name for a 100 % markup: the selling price is twice the cost, which is a 50 % gross margin. It is a long-standing convention in physical retail, where the store's own costs — rent, staff, shrinkage, returns — have to come out of that 50 % before any profit is left.

The 100 % keystone button sets the markup so you can see the price and margin it implies for your own cost; it does not recommend it. A retailer with high rent may need more than keystone to cover overheads, and a seller in a category with intense price competition may not be able to charge it.

How do two markups combine from wholesale to retail?

In a two-stage chain the wholesaler marks up the manufacturer's cost and the retailer marks up the wholesale price. With a $10 manufacturer cost, a 40 % wholesaler markup gives a $14 wholesale price, and a 60 % retailer markup on that gives $22.40 at retail.

The overall markup on the original cost is (22.40 − 10) ÷ 10 × 100 = 124 %, more than 40 + 60, because the second markup is applied to a larger base. The wholesaler's margin is 28.57 % and the retailer's 37.50 % — each stage's profit divided by its own selling price. Enter both markups in Advanced to see the chain for your figures.