Markup Calculator

How to Calculate Your Selling Price and Markup

Pick whether you want to find your selling price or calculate your markup percentage. Enter what you paid for the product. Include shipping, fees, and handling in that number. Then input either your markup percentage or your selling price depending on which mode you picked.

The calculator gives you the selling price, markup amount, and profit margin. You'll see markup and margin side by side. They're different numbers because one divides by cost and one divides by price. People mix these up constantly.

Pricing bulk orders? Use the quantity field. Want to test different markups? Try a few percentages to see what works. The industry standards below show typical markups for different businesses.

What Is Markup? Definition and Formula

Markup Definition

Markup is the percentage you add to your cost to get your selling price. The formula is Selling Price = Cost × (1 + Markup%). A product costs $47 and you apply a 100% markup. You add $47 more and sell it for $94. Markup always starts from cost. Margin starts from selling price.

Markup Formula

The calculation is Markup % = ((Selling Price - Cost) / Cost) × 100. You buy something for $38 and sell it for $57. Your markup is ($57 - $38) / $38 × 100 = 50%. You added 50% to your cost. To go the other way, use Selling Price = Cost × (1 + Markup% / 100). A $38 item with 50% markup becomes $38 × 1.50 which equals $57.

Why Markup Matters

Markup covers your costs and gives you profit. Sell at cost with zero markup and you make nothing. The business won't last. Your markup has to cover overhead, inventory that doesn't sell, returns, and leave profit. Without enough markup, sales don't save you from losing money.

Converting Markup to Margin

Use this formula: Margin = (Markup / (1 + Markup)) × 100. Take 100% markup. Plug it in: (1 / 2) × 100 = 50% margin. Double your cost and you get 50% margin. A 50% markup converts to 33% margin. A 200% markup gives 67% margin. Markup is always higher than margin for the same product.

Converting Margin to Markup

Flip it around with Markup = (Margin / (1 - Margin)) × 100. Want a 40% profit margin? Calculate (0.40 / 0.60) × 100 which equals 67%. You need a 67% markup to hit that 40% margin target. People assume they can apply a 40% markup to get 40% margin. Doesn't work. You end up short on profit.

Markup Pricing Tips to Increase Your Profit

• Include all costs in your base cost – Don't just count the purchase price. Add in shipping, handling fees, credit card processing fees of 2 to 3 percent, packaging, and any other costs to get the product ready to sell.
• Start with keystone pricing – Standard retail markup sits at 50-100%, known as keystone pricing because it doubles your cost. It's a good baseline that usually covers overhead and leaves room for profit.
• Go higher on luxury and specialty items – Customers buying luxury products pay for brand, quality, and experience. These items can support 200-500% markups without resistance.
• Stay competitive on commodity products – Items customers can easily comparison shop need lower markups, typically 20-40%. You're competing on price here, so big markups drive customers elsewhere.
• Test price increases regularly – Try raising prices by 10% and watch what happens. Many businesses find that modest price increases rarely affect sales volume but significantly boost profit.
• Use higher markups on low-priced items – A $5 item with 200% markup becomes $15, which still feels reasonable. Low dollar amounts can handle higher percentage markups.
• Use lower markups on high-priced items – A $500 item with 50% markup becomes $750. That's still solid profit without scaring off customers with four-figure prices.
• Bundle products strategically – Mix high-markup and low-markup items in bundles. This increases your average transaction value and overall markup while giving customers perceived value.
• Mark up accessories more than main products – The printer is cheap, but the ink cartridges carry high markups. Accessories and consumables often generate more profit than the main product.
• Discount aged inventory intelligently – Lower your markup on clearance items. Getting some profit is better than storing products forever or taking a total loss.

Standard Markup by Industry

Retail Clothing

Clothing retailers work with markups between 50 and 100 percent. The industry calls this keystone pricing. A department store shirt selling for $58 cost them around $29 wholesale. Luxury fashion runs 200 to 300 percent markups. Fast fashion sits at 100 to 150 percent. Department stores mark up 100 percent then discount 30 or 40 percent constantly. Still profitable since the discount was built into the original price.

Grocery Stores

Groceries run on thin markups of 10 to 25 percent. They make it work through volume. Produce gets marked up around 15 to 25 percent. Packaged goods run 10 to 20 percent. Specialty items hit 25 to 40 percent. A box of cereal costs the store $2.87 and sells for $3.45. That's a 20% markup. Low margin but they move thousands of boxes weekly.

Restaurants and Bars

Food gets marked up 200 to 300 percent in restaurants. A pasta dish selling for $27 has maybe $8 in food costs. Drinks bring higher markups. A cocktail at $11 costs the bar roughly $1.80 in ingredients. That's over 500 percent markup. Beer and wine work the same way. Beverage margins beat food margins significantly.

Jewelry

Jewelry markups run from 200 to 500 percent. A ring costing the store $487 might sell for $1,950 to $2,900. Diamonds get marked up 100 to 200 percent. Custom work hits 300 to 500 percent. Low turnover means each sale covers months of overhead. Factor in expertise, theft risk, insurance, and luxury positioning.

Electronics

Electronics run on low markups of 10 to 30 percent. A laptop costing a retailer $783 sells for around $860 to $1,010. Online competition squeezes these margins. Electronics stores actually make profit on accessories. A $28 cable or $47 case carries 50 to 100 percent markups. Sales staff push accessories because that's where the money is. The laptop brings customers in. The accessories generate profit.

Furniture

Furniture markups range from 50 to 150 percent. A couch costing $387 gets priced at $775 to $970. Custom pieces go higher at 100 to 200 percent markup. These numbers cover showroom space, delivery, and assembly. People buy furniture rarely so each sale has to generate enough margin.

Auto Parts

Auto parts get marked up 30 to 50 percent. OEM parts run 30 to 40 percent. Aftermarket parts go 40 to 50 percent. A part costing the shop $48 gets charged at $62 to $72. Parts aren't where shops make money though. Labor drives profit. A shop might break even on parts while charging over $100 per hour for labor.

Beauty and Cosmetics

Cosmetics carry some of the highest markups at 100 to 400 percent. A $23 lipstick cost around $2.80 to make. Skincare runs 100 to 300 percent markups. The numbers work because of branding, R&D, marketing, and luxury positioning. Customers pay for the brand and results, not just the product.

Wholesale and Distribution

Wholesalers run low markups of 10 to 25 percent on massive volume. They buy bulk from manufacturers, add a small markup, and sell to retailers. A wholesaler buys an item for $9.70, sells it to a retailer for $11.65. That's a 20% markup. The retailer marks it up again to $23.30 for consumers. The wholesaler makes $1.95 per unit but moves thousands daily.

Keystone Pricing (100% Markup)

What Is Keystone Pricing?

Keystone pricing doubles your cost. You apply a 100% markup. A product costs $53 and sells for $106. Retailers have used this for decades because multiplying by 2 is easy. Most retailers find it profitable.

Why Keystone Works

Doubling your cost gives 50% margin. That covers labor, overhead, unsold inventory, returns, and profit. Mark something down 25% for a sale and you still have 25% margin. Not amazing but sustainable. The structure works for most products even with discounts.

When Keystone Isn't Enough

High overhead businesses can't always work with 100% markup. A boutique paying $9,800 monthly rent needs 150 to 200 percent markups. A big-box store with lower overhead per square foot survives on 50 percent. Know your costs before picking a markup strategy.

When Keystone Is Too Much

Commodity products can't support 100% markups when competition is intense. Electronics, groceries, and office supplies max out around 20 to 40 percent. Customers comparison shop. They won't pay double wholesale when they can check five stores online in seconds. Unique products support higher markups. Commodities need competitive pricing.

Keystone Plus Discounts

Many retailers keystone specifically to create discount room. Buy something for $49, keystone to $98, offer 30% off for $68.60. The customer feels good about the deal. You made a 40% gross margin. Retail prices often seem inflated because they're designed to leave room for sales. High initial markup plus frequent discounts equals happy customers and healthy margins.

Double Keystone (200% Markup)

Some retailers triple their cost with a 200% markup. That gives 67% profit margin. Works for luxury goods, specialty items, and low-volume products. An item costing $47 sells for $141. The high margin compensates for low turnover. You can hold inventory longer and still cover overhead. Selling only a few units monthly means each sale has to generate significant profit.

Different Ways to Price Your Products

Cost-Plus Pricing

Add a fixed markup percentage to every product. Apply 100% markup across everything. An item costing $19 sells for $38. An item costing $97 sells for $194. Easy to calculate and margins stay consistent. Downsides exist though. You ignore what customers will pay, what competitors charge, and perceived value. Sometimes you leave money on the table. Other times you price yourself out.

Value-Based Pricing

Price based on customer value, not your costs. A product costs you $9.50 but saves your customer $1,000. Price it at $197. That's over 1,900% markup but the value supports it. Software and services work better with value-based pricing than cost-plus. What's it worth to them matters more than what it cost you.

Competitive Pricing

Set markup based on competitor pricing. Similar products sell for $48 so you price at $44 to $48. Your cost is $18 which gives you 144 to 167 percent markup. Works for commodities where customers comparison shop. The problem is it triggers margin compression. Competitors dictate your pricing instead of you building value.

Psychological Pricing

Pricing psychology affects conversions. $97 versus $100 delivers the same margin but $97 converts better. Prices like $47, $87, and $197 feel like deals. Round numbers like $50, $100, and $500 signal premium quality. Odd prices such as $49.99 suggest savings. Prices ending in 7 or 9 tend to perform well.

Premium Pricing

High markups need quality, brand strength, and exclusivity to work. Apple marks up iPhones over 300 percent. Luxury brands go over 500 percent on handbags. Customers pay for status and brand, not just the product. Strong brand equity is required. Commodity products can't command premium prices.

Penetration Pricing

Start with low markups to grab market share then raise prices later. Sell at 20% markup for year one to build customers. Increase to 100% markup once you have momentum. Amazon used this approach. They lost money initially to dominate then raised prices gradually. Risky since it requires capital to sustain losses.

Common Markup Mistakes That Hurt Your Profit

Confusing Markup and Margin

Business owners mix these up constantly. You want 50% profit margin so you apply 50% markup. The numbers don't work. A 50% markup only delivers 33% margin, not the 50% you wanted. To get 50% margin you need 100% markup. Double-check the math or use a calculator. Get this wrong and your prices won't support the business.

Not Including All Costs

People count product cost then forget shipping, credit card fees, and packaging. An item costs $37 plus $4.80 shipping plus $1.90 packaging. That's $43.70 in actual costs. Apply 100% markup to just the $37 and you sell at $74. With $43.70 true cost, your real markup is only 69%, not 100%. Include every cost in the base number.

Ignoring Overhead

Markup needs to cover overhead like rent, salaries, and utilities, not just product cost. Overhead at 30% of revenue means you need minimum 43% gross margin to leave 13% for profit. That requires 75% markup just to break even. Businesses forget to factor in overhead then struggle with profitability.

One-Size-Fits-All Markup

Using the same markup on everything rarely works. High-cost items need lower markup percentages. Low-cost items can handle higher markups. A $483 item with 50% markup becomes $724.50. Reasonable. But a $4.70 item with 50% markup becomes $7.05 which feels cheap. Charge $9.40 to $14.10 for that $4.70 item instead. Customers judge value differently at different price points.

Not Adjusting for Competition

Marking up 200% when competitors sell the same product at 50% markup loses sales. Customers buy from competitors. Check competitive pricing before setting markup. Unique products support high markups. Commodity products need competitive markups to move.

Forgetting About Discounts

Build discount room into markup from the start. Regular 25% discounts mean you need enough initial markup to stay profitable after the discount. A 100% markup with 25% discount leaves 50% final margin. Workable. Planning to run sales? Basic keystone won't cut it. You need higher initial markup to maintain margins after discounts.

Not Testing Price Points

Business owners set markup once then never revisit it. Test higher prices. The results might surprise you. Raising prices 10 to 20 percent rarely drives customers away but boosts profit per sale significantly. Don't assume customers are price-sensitive. Test it and measure actual results.

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