Markup Calculator

Markup and margin are two of the most commonly confused concepts in pricing, yet understanding the difference between them is critical for any business that sells products or services. Markup is the percentage added to the cost price to arrive at the selling price. Margin, on the other hand, is the percentage of the selling price that represents profit. A 50% markup does not produce a 50% margin — it produces a 33.3% margin.

For example, if a product costs $50 and you apply a 40% markup, the selling price becomes $70. Your profit is $20, but your profit margin is only 28.6% because margin is calculated against the selling price, not the cost. This distinction matters when comparing your pricing to industry benchmarks, which are often expressed as margins rather than markups.

Effective pricing strategy requires balancing competitive positioning with profitability. Setting markup too low may generate sales volume but leave insufficient margin to cover overhead costs. Setting it too high can price you out of the market. Many retailers use keystone pricing, which is a 100% markup that doubles the cost price, while other industries work with much thinner margins.

This markup calculator takes your cost price and desired markup percentage, then instantly computes the selling price, dollar profit, and the equivalent profit margin. Use it to experiment with different markup levels and find the pricing sweet spot for your products or services.