Markup Calculator
Calculate markup percentage from cost and selling price. Find profit amount, gross margin, and see the complete breakdown of your pricing strategy.
What Is Markup?
Markup is the percentage added to the cost of a product to determine its selling price. It represents how much more than the cost you are charging. Markup is calculated relative to cost, making it different from margin, which is calculated relative to selling price.
Markup is essential for pricing strategy. Every retailer, wholesaler, manufacturer, and service provider uses markup to set prices that cover costs, overhead, and generate profit.
Markup Formula
Markup vs. Margin
Markup and margin are related but different calculations. The key distinction:
- Markup is based on cost: (Price - Cost) ÷ Cost
- Margin is based on selling price: (Price - Cost) ÷ Price
| Markup % | Margin % | Multiplier |
|---|---|---|
| 15% | 13.0% | 1.15× |
| 25% | 20.0% | 1.25× |
| 33.3% | 25.0% | 1.33× |
| 50% | 33.3% | 1.50× |
| 75% | 42.9% | 1.75× |
| 100% | 50.0% | 2.00× |
| 150% | 60.0% | 2.50× |
| 200% | 66.7% | 3.00× |
| 300% | 75.0% | 4.00× |
Average Markup by Industry
| Industry | Typical Markup | Equivalent Margin |
|---|---|---|
| Grocery | 15–25% | 13–20% |
| Clothing/Apparel | 100–300% | 50–75% |
| Electronics | 30–50% | 23–33% |
| Restaurants (food) | 200–400% | 67–80% |
| Restaurants (drinks) | 400–600% | 80–86% |
| Jewelry | 100–400% | 50–80% |
| Construction | 10–25% | 9–20% |
| SaaS / Software | 500–1000%+ | 80–90%+ |
Common Markup Mistakes
- Confusing markup with margin. A 50% markup is NOT a 50% margin. A 50% markup equals only 33.3% margin.
- Not including all costs. Markup should cover COGS, overhead, labor, shipping, and profit. Calculate your total landed cost before applying markup.
- Using the same markup across all products. High-demand items can support higher markups. Loss leaders may have low or negative markup to drive traffic.
- Ignoring competitor pricing. Markup must be competitive. Price too high and you lose sales. Price too low and you leave money on the table.
Pro Tip: Keystone pricing (100% markup, 2× multiplier) is a simple starting point for retail. It produces a 50% gross margin. Adjust up or down based on competition, demand elasticity, and overhead costs.
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- Margin Calculator — Calculate gross margin from cost and price
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- Sharpe Ratio Calculator — Risk-adjusted returns