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Markup vs Margin Calculator
Calculate markup percentage, gross margin, and selling price from cost. Understand the difference between markup and margin to price products profitably.
About This Calculator
Pricing products correctly is the difference between a profitable business and one that struggles to stay afloat. Markup and margin are often confused but they're fundamentally different — a 50% markup on a $10 cost gives a $15 selling price with a 33% margin, while a 50% margin on the same cost requires a $20 selling price. Getting this wrong means either leaving money on the table or pricing yourself out of the market. Our markup calculator handles the conversion between cost, selling price, markup percentage, and profit margin for clear pricing decisions.
The Formula Behind This Calculator
Markup = (Price - Cost) / Cost * 100% Margin = (Price - Cost) / Price * 100% 50% markup = 33% margin.
Understanding the math helps you verify results and make better decisions for your project.
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How to Use
- 1Enter the cost of your product (what you paid or it costs to make).
- 2Enter your desired markup percentage.
- 3Click Calculate for selling price, margin, and profit per unit.
When to Use
- →Setting the right selling price for a product when you know your cost and desired markup
- →Understanding the difference between markup and margin to avoid underpricing your products
- →Comparing profitability between products with different costs and markup percentages
Tips
- ✓Don't confuse markup with margin — a 50% markup gives you only a 33% margin, which many new business owners misunderstand
- ✓For a target margin of X%, use the formula: Markup = X% ÷ (1 - X%) to find the correct markup to apply
- ✓Factor in all costs (shipping, packaging, payment processing fees) before setting your selling price
FAQ
What is the difference between markup and margin?
Markup is profit divided by cost. Margin is profit divided by selling price. A 50% markup on a $100 item sells for $150 with a 33.3% margin. A 50% margin on a $100 item sells for $200 with a 100% markup.
What is a good markup for retail products?
Keystone markup (100%) is retail standard — doubling the cost. Grocery runs 15-25%. Clothing: 50-100%. Electronics: 20-40%. Specialty/niche: 100-300%.
How do I calculate what markup I need for a target margin?
Markup % = Margin % ÷ (1 - Margin %). For a 40% margin: 0.40 ÷ 0.60 = 66.7% markup needed. This calculator works in the other direction — enter markup to see resulting margin.
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