How to use the markup calculator
Enter what one unit costs you and the markup you plan to add. The calculator returns the selling price, profit per unit and the gross margin that markup produces. Open the table under the result to compare prices at other common markups for the same cost.
The markup formula
Selling price = cost × (1 + markup ÷ 100)
Profit = selling price − cost
Gross margin = profit ÷ selling price × 100 = markup ÷ (100 + markup) × 100
To find the markup you are already charging, reverse it: markup = (price − cost) ÷ cost × 100. An item bought for $25 and sold for $40 carries a 60% markup.
Worked example
A bakery's direct cost for a custom cake — ingredients, box and decorations — is $40. With a 50% markup the price is 40 × 1.5 = $60, and profit is $20. The margin is 20 ÷ 60 = 33.3%: a third of each sale is gross profit, not half. Everything else the bakery spends — rent, ovens, wages, advertising — has to come out of that $20.
Markup and margin conversion tables
Markup is measured against cost and margin against price, so the same profit gives two different percentages:
| Markup | Gross margin |
|---|---|
| 10% | 9.09% |
| 20% | 16.67% |
| 25% | 20% |
| 30% | 23.08% |
| 40% | 28.57% |
| 50% | 33.33% |
| 60% | 37.5% |
| 75% | 42.86% |
| 100% | 50% |
| 150% | 60% |
| 200% | 66.67% |
Working the other way — the markup you need to reach a target margin:
| Target margin | Markup needed |
|---|---|
| 10% | 11.11% |
| 15% | 17.65% |
| 20% | 25% |
| 25% | 33.33% |
| 30% | 42.86% |
| 35% | 53.85% |
| 40% | 66.67% |
| 50% | 100% |
| 60% | 150% |
| 70% | 233.33% |
| 75% | 300% |
| 80% | 400% |
The conversion formulas, using decimals: margin = markup ÷ (1 + markup) and markup = margin ÷ (1 − margin).
Keystone pricing
Retailers call a 100% markup — doubling the wholesale cost — keystone pricing. It produces a 50% gross margin and is a common starting point in some retail sectors. Whether it is right for you depends on your overhead, your competitors' prices and what customers will pay.
Where markup alone can mislead you
- Discounts come out of the price, not the cost. Mark a $40 item up 50% to $60, then run a 20% off sale: the price drops to $48 and profit falls from $20 to $8. A 20% discount wiped out 60% of the profit. Check sale prices with the discount calculator.
- Markup ignores overhead. A healthy markup on each item does not guarantee a profitable business; volume has to cover fixed costs too. The break-even calculator shows how many units that takes.
- Say which number you mean. Accountants and investors usually talk about margin; buyers and wholesalers often talk about markup. "30%" without the word attached is an invitation to price wrong.
Frequently asked questions
What is the difference between markup and margin?
Markup is profit as a percentage of cost; margin is profit as a percentage of the selling price. For an item that costs $40 and sells for $60, the markup is 50% and the margin is 33.3%.
What markup do I need for a 40% margin?
Divide the margin by one minus the margin: 0.40 ÷ 0.60 = 0.667, so a 66.7% markup. On a $30 cost that is a $50 price.
What does a 100% markup mean?
The selling price is double the cost. A $15 item sold for $30 has a 100% markup and a 50% gross margin.
How do I calculate markup from cost and selling price?
Subtract cost from price, divide by cost and multiply by 100. Bought for $25 and sold for $40: (40 − 25) ÷ 25 × 100 = 60% markup.
Should markup be based on cost including shipping?
Yes. Use your landed cost — the product plus inbound freight, duties and packaging. Marking up only the invoice price makes your real margin smaller than it looks.
Last updated: October 8, 2026