What price your markup gives
Markup is the amount you add to cost, as a percentage of that cost: Selling price = cost × (1 + markup ÷ 100). Add 40% markup to a $50 item and you add $20, for a selling price of $70. That same $20 profit is a 28.6% margin on the selling price.
How to use this calculator
Enter your cost and the markup percentage you want to apply. The result shows the selling price, the dollar profit per unit, and the resulting profit margin — so you can set prices and immediately see the margin they create. Rolled up across a product line it becomes gross profit margin.
Markup vs. margin (they are not the same)
Markup is profit as a percentage of cost; margin is profit as a percentage of the selling price. A 40% markup is only a 28.6% margin. Markup is always the bigger number for the same deal. To go the other way — from a price you already have to its margin — use the margin calculator.
Markup to margin conversion
Here is how common markups translate into margins:
| Markup | Margin | $50 cost → price |
|---|---|---|
| 20% | 16.7% | $60.00 |
| 40% | 28.6% | $70.00 |
| 50% | 33.3% | $75.00 |
| 100% | 50.0% | $100.00 |
| 150% | 60.0% | $125.00 |
Choosing the right markup
Your markup has to cover more than the product cost — it also pays for overhead, returns, shipping and the margin you actually want to keep. Retail markups often run 50–100%, but thin-volume or commodity goods use less. If you plan to run sales, build the discount into your markup first; check the discount calculator to see what a promotion costs you.
These figures are an estimate for general information only and are not financial advice; consult a qualified professional before making money decisions.
Frequently asked questions
- How do I calculate markup?
- Multiply the cost by the markup percentage to get the added amount, then add it to the cost. A 40% markup on $50 adds $20, giving a $70 selling price.
- 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. A 40% markup equals a 28.6% margin.
- How do I convert markup to margin?
- Margin = markup ÷ (1 + markup). For a 40% markup: 0.40 ÷ 1.40 = 0.286, or 28.6%.
- What is a good markup percentage?
- It depends on your costs and industry. Many retailers use 50–100%, but the right markup must cover overhead, returns and your target profit, not just the product cost.
- What selling price gives a specific margin?
- Divide the cost by (1 − target margin). For a 50% margin on a $50 cost: 50 ÷ 0.5 = $100, which is a 100% markup.