Calculate your target unit selling price, gross profit, and gross profit margin using cost and markup settings.
| Markup % | Target Price | Gross Profit | Equivalent Gross Margin % |
|---|
Say a product costs you $40 to source. You want a 50% markup on that cost. The formula is simple:
Selling Price = Cost * (1 + Markup %)
Selling Price = $40 * 1.50 = $60.00You can check the answer works backward, too: ($60 − $40) / $40 = 0.50, or 50%. That confirms the markup calculation is internally consistent.
Markup and margin are the two most confused numbers in retail pricing, and mixing them up isn't a minor slip — it can quietly wreck a pricing strategy. Markup is calculated as a percentage of your cost. Margin, by contrast, is calculated as a percentage of your selling price. Same two dollar figures, two different denominators, two different percentages.
Take the example above: a $40 cost marked up 50% gives a $60 price. But the margin on that same $60 price is only 33.3%, not 50%, because margin divides the $20 profit by the $60 price rather than the $40 cost. A retailer who reads "50% markup" and assumes it means "50% margin" will consistently underprice relative to their actual profitability targets. If you need to work in margin terms specifically, our Margin Calculator handles that calculation directly rather than requiring you to convert manually.
I find that most confusion here comes from casual use of the word "markup" in everyday conversation to mean anything about profitability, when in cost-accounting terms it has one specific, narrow definition: profit divided by cost, not profit divided by price.
Enter your cost and either your desired markup percentage (to solve for selling price) or your current selling price (to solve for the markup percentage that price represents). The calculator runs the appropriate direction of the same underlying relationship.
Markup % = (Selling Price - Cost) / Cost * 100
Selling Price = Cost * (1 + Markup % / 100)Everything runs client-side using basic arithmetic — there's no external algorithm or lookup involved, and no data you enter is transmitted anywhere or stored after you close the page.
Don't confuse a markup percentage with a margin percentage when discussing pricing with a supplier, accountant, or business partner — ask explicitly which one they mean, because the two numbers diverge more as the percentage gets larger. At 10%, markup and margin are close (10% vs. 9.1%). At 100%, they're far apart (100% markup is only a 50% margin).
Remember that markup calculated this way doesn't account for payment processing fees, shipping costs you absorb, or returns and shrinkage — all of which eat into the profit the markup percentage implies on paper. Build a buffer into your target markup if those costs are significant in your business.
Industry markup norms vary enormously by category — apparel retailers commonly work with markups in the 50%–100% range, while grocery often runs much thinner, frequently in the 15%–25% range, because of volume and perishability. Treat any "typical markup" figure as a rough starting benchmark, not a rule.
Combine this tool with our Discount Calculator when planning a promotion — knowing your markup tells you how much room you actually have to discount before a sale erodes your profit down to zero or below.
What you shouldn't do is set your markup purely by copying a competitor's advertised price. Their cost structure, supplier terms, and overhead may be completely different from yours, and matching their price without knowing their cost basis can put you at a loss without realizing it.
Retail Boutique Pricing: A boutique owner buys a jacket wholesale for $85 and wants a 60% markup to stay competitive with similar stores in her area. The calculator returns a selling price of $136, and she rounds to a $135 price point for a cleaner shelf tag.
Wholesale Distributor Reseller Pricing: A wholesale distributor sells a bulk item to retailers at $22 per unit and needs to set a suggested retail markup of 45% so retailers know what price supports a healthy margin for them. The tool shows retailers should list the item around $31.90 to hit that target.
Freelance Print Markup: A freelance graphic designer outsources printing for a client project at a $300 cost from her print shop and applies a standard 25% markup when billing the client, landing on $375 — covering her time coordinating the order without a separate line-item fee.
Restaurant Menu Costing: A restaurant calculates food cost for a pasta dish at $4.50 per plate and targets a 300% markup, a common benchmark in food service, which puts the menu price at $18.00 — a number the owner then compares against what similar dishes cost at nearby restaurants.
Dropshipping Price-Setting: An online dropshipper sources a product at $12 from a supplier and tests markups from 80% to 150% in the calculator to see which selling price still looks competitive on marketplaces before committing to a listing price.
Business Math Coursework: A student in an introductory retail math class uses the calculator to check homework answers on markup problems, verifying their manual calculations before submitting an assignment.
Is a 50% markup the same as doubling your cost?
No. Doubling your cost is a 100% markup. A 50% markup on a $40 cost gives $60, not $80. This is one of the most common markup miscalculations in casual retail conversation.
How do I convert a markup percentage into a margin percentage?
Margin = Markup / (1 + Markup), expressed as a decimal. A 50% markup (0.50) converts to a margin of 0.50 / 1.50 = 33.3%. Our Margin Calculator performs this conversion directly if you'd rather not do it by hand.
What markup should I use if I don't know an industry standard?
There's no universal answer — it depends on your fixed costs, sales volume, and how price-sensitive your customers are. A common approach is to start from your break-even math (see our Break-Even Calculator) and build a buffer above that floor.
Does markup account for sales tax?
No, this calculator computes the pre-tax selling price based purely on cost and markup. Sales tax, where applicable, is typically added on top of the calculated price at checkout, not folded into the markup itself.
Can markup be negative?
Yes, if you sell below cost — sometimes intentionally, as a loss leader to drive foot traffic. The calculator will return a negative markup percentage in that case, which is mathematically valid even though it represents a loss on that specific item.
Margin Calculator — Calculates profit margin as a percentage of price rather than cost — use this when you need to know what portion of your revenue is actual profit, not just how much you've added on top of cost.
Discount Calculator — Works out a sale price from an original price and discount percentage, including stacked discounts — pairs with this tool to check how much discounting room your markup leaves before you hit break-even.
Break-Even Calculator — Determines how many units you need to sell at your chosen markup-derived price to cover your fixed costs — useful once you've settled on a price here and want to know the volume it requires.