Markup Calculator
This markup calculator helps you find the right selling price for your products or services based on your cost and desired profit. Whether you're pricing inventory for your retail store, setting menu prices for your restaurant, or quoting rates as a freelancer, this tool gives you instant answers so you can make confident pricing decisions.
Enter your cost and markup percentage, and the calculator shows your selling price and profit immediately. No formulas to remember, no spreadsheets to set up—just quick, accurate numbers when you need them.
What is Markup?
Markup is the amount you add to your cost to reach your selling price, expressed as a percentage of that cost. It answers a simple question: how much profit am I adding on top of what I paid?
If you buy a product for $100 and sell it for $150, you've added $50 on top of your cost. That $50 represents a 50% markup because it's half of your original $100 cost.
The markup formula works like this:
Markup % = (Profit ÷ Cost) × 100
Or to find selling price directly:
Selling Price = Cost × (1 + Markup% ÷ 100)
Markup vs Margin: The Difference That Affects Your Profits
Here's where many business owners get tripped up. Markup and margin both measure profit, but they use different reference points—and confusing them can cost you real money.
Markup measures profit as a percentage of your cost (what you paid).
Margin measures profit as a percentage of your selling price (what the customer pays).
Same transaction, different percentages. Here's a concrete example:
Metric | Amount |
|---|---|
Cost | $100 |
Selling Price | $150 |
Profit | $50 |
Markup | 50% (profit ÷ cost) |
Margin | 33.3% (profit ÷ selling price) |
Notice that markup is always the larger number. A 50% markup equals only a 33.3% margin. If you're aiming for a 50% margin but accidentally apply a 50% markup, you'll end up with significantly less profit than expected.
Quick Conversion Reference
Markup % | Equals Margin % |
|---|---|
25% | 20% |
50% | 33.3% |
100% | 50% |
200% | 66.7% |
Conversion formulas:
- Markup to Margin: Margin = Markup ÷ (1 + Markup)
- Margin to Markup: Markup = Margin ÷ (1 - Margin)
How to Use This Calculator
Step 1: Enter your cost—what you paid for the product or what it costs you to deliver a service.
Step 2: Enter your desired markup percentage. Not sure what to use? Check the industry benchmarks below for typical ranges.
Step 3: View your results. The calculator instantly shows:
- Revenue (your selling price)
- Profit (the dollar amount you earn above cost)
You can adjust either input to see how different markup percentages affect your final numbers.
Industry Markup Benchmarks
Markup percentages vary widely depending on your industry, overhead costs, and competitive landscape. These ranges give you a starting point for your own pricing decisions.
Industry | Typical Markup Range |
|---|---|
Grocery/Supermarket | 10% - 25% |
Clothing Retail | 50% - 100% |
Restaurant Food | 150% - 300% |
Restaurant Beverages | 200% - 400% |
Jewelry | 50% - 100% |
Electronics | 20% - 40% |
Furniture | 40% - 80% |
Auto Parts | 30% - 50% |
Consulting Services | 50% - 150% |
Construction | 15% - 25% |
These are general guidelines. Your specific markup should account for your overhead costs, local competition, target customers, and the value you're providing. A specialty boutique can often command higher markups than a discount retailer selling similar products.
Practical Examples
Example 1: Retail Clothing Store
You purchase t-shirts wholesale for $12 each and want a 100% markup.
- Cost: $12
- Markup: 100%
- Selling Price: $12 × (1 + 1.00) = $24
- Profit per shirt: $12
At this markup, selling 100 shirts generates $1,200 in gross profit.
Example 2: Restaurant Menu Pricing
Your signature pasta dish costs $6 in ingredients. You apply a 250% markup (typical for restaurant food).
- Cost: $6
- Markup: 250%
- Selling Price: $6 × (1 + 2.50) = $21
- Profit per dish: $15
This covers not just ingredients but also labor, rent, utilities, and other overhead that restaurants must account for.
Example 3: Freelance Consulting Rate
Your effective hourly cost (including taxes, benefits, and overhead) is $45. You want a 75% markup.
- Cost: $45/hour
- Markup: 75%
- Billing Rate: $45 × (1 + 0.75) = $78.75/hour
- Profit per hour: $33.75
Many freelancers round to clean numbers for client quotes—$80/hour in this case.
Example 4: Wholesale to Retail
You're a wholesaler selling electronics. Your cost is $200 per unit, and you apply a 30% markup for your retail partners.
- Cost: $200
- Markup: 30%
- Wholesale Price: $200 × (1 + 0.30) = $260
- Profit per unit: $60
Your retail partners then apply their own markup before selling to consumers.
When to Use Markup vs Margin
Both metrics have their place. Here's when each makes more sense:
Use Markup When:
- Calculating selling prices from known costs
- Comparing pricing across products with different costs
- Working in industries where markup is the standard (wholesale, manufacturing)
- You want to ensure a consistent profit amount relative to what you spend
Use Margin When:
- Analyzing overall business profitability
- Comparing performance to industry benchmarks (most financial reports use margin)
- Working with investors or lenders who expect margin figures
- You want to know what percentage of each sale is profit
Many businesses track both: markup for day-to-day pricing decisions, margin for financial reporting and analysis.
Beyond the Numbers
While this calculator helps you determine selling prices based on your costs, effective pricing involves more than simple markup calculations. Consider factors like what competitors charge for similar products, the perceived value your offering provides to customers, your total overhead costs beyond direct product costs, and customer price sensitivity in your market.
Even small adjustments to your markup percentage can meaningfully impact your bottom line over time. Test different price points when possible, and review your markup strategy regularly as your costs and market conditions change.