Markup Calculator — Find Selling Price From Cost & Markup %
Find selling price from cost and markup %.
Results
- Cost
- $80.00
- Markup %
- 25.00%
- Markup amount (profit)
- $20.00
- Selling price
- $100.00
- Equivalent gross margin
- 20.00%
Conversion: margin = markup / (1 + markup). A 25.00% markup equals a 20.00% gross margin.
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Markup formula
Markup % = (Selling Price − Cost) / Cost × 100. Rearranging gives the inverse: Selling Price = Cost × (1 + Markup% / 100).
Worked example: a product costs $80 and you apply a 25% markup. Markup amount = $80 × 0.25 = $20. Selling price = $80 + $20 = $100. That $20 of profit on $100 of revenue is a 20% gross margin — the same deal, just measured against price instead of cost.
Markup vs margin (the confusing part)
Markup and margin are not the same number. Markup is profit as a share of cost; margin is profit as a share of selling price. Because price is always larger than cost (on a profitable sale), markup is always the bigger percentage. Mixing them up is one of the most common pricing mistakes — a buyer asking for a "30% discount off your 30% margin" isn't leaving you with zero, but reps who confuse the two often quote prices that lose money.
Convert between them with margin = markup / (1 + markup). A quick reference grid:
| Markup | Equivalent margin |
|---|---|
| 10% | 9.1% |
| 25% | 20% |
| 50% | 33.3% |
| 100% (keystone) | 50% |
| 200% | 66.7% |
How to choose a markup
- Cover overheads. Rent, salaries, software, and warehousing have to be paid out of gross profit — not just cost of goods.
- Target net profit. Work backwards from the net margin you want after operating expenses to set a floor on markup.
- Account for shrinkage and returns. Damaged stock, theft, refunds, and discounts all erode realized markup. Build in a buffer of 2-10% depending on category.
- Match market positioning. Premium brands carry higher markups; volume retailers compete on lower markup with faster turns. Benchmark against the competitor your customer is comparing you to.
FAQs
What's a typical retail markup?
Markups vary widely by industry. Apparel often runs 100-300%, grocery is razor-thin at 10-15%, consumer electronics typically 5-25%, and restaurants apply 60-300% on food (with beverages often higher). Wholesale and B2B distribution usually sit between 20-50% depending on volume and exclusivity.
How is markup different from profit margin?
Markup is the percentage added on top of cost (profit divided by cost). Margin is the percentage of selling price that is profit (profit divided by price). They describe the same dollar profit from two angles, so a 25% markup equals a 20% margin. Use the formula margin = markup / (1 + markup) to convert.
Should I use markup or margin for pricing decisions?
Use markup when you're setting prices from the cost up — it's intuitive at the shelf and SKU level. Use margin when you're analyzing profitability, comparing categories, or reporting to finance. Mixing them up causes underpricing: a 30% markup is only a 23% margin, not 30%.
How do I calculate keystone pricing?
Keystone pricing means doubling the wholesale cost — a 100% markup, which equals a 50% gross margin. It's a quick rule of thumb in retail, especially apparel and gifts, but most modern retailers blend keystone for some categories with thinner markups on competitive staples.
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