Markup Calculator
Determine your optimal selling price and gross profit by entering your product cost and desired markup percentage.
Understanding Markup vs. Margin for Profitable Pricing
Accurate pricing is the bedrock of a successful business. Whether you are running a retail store, an e-commerce site, or a wholesaling operation, knowing how to set prices above your costs is essential for survival. This Markup Calculator simplifies the process of determining what you should charge your customers based on what it costs you to acquire or produce an item.
What is Markup?
Markup is the amount added to the cost price of goods to cover overhead and profit. It is generally expressed as a percentage of the cost. It answers the question: "How much am I adding on top of what I paid?"
The basic formula for markup is:
Selling Price = Cost Price + (Cost Price × Markup Percentage)
Markup vs. Gross Margin: The Crucial Difference
These two terms are often confused, leading to dangerous pricing errors. While they both deal with profit, they use different baselines.
- Markup is the percentage of profit based on the Cost.
- Gross Margin is the percentage of profit based on the Selling Price (Revenue).
For example, if you buy a product for $100 and sell it for $150, your profit is $50.
- Your Markup is 50% ($50 profit / $100 cost).
- Your Gross Margin is 33.3% ($50 profit / $150 selling price).
Our calculator provides both metrics in the results so you have a complete financial picture.
How to Use This Calculator
Using this tool is straightforward. You only need two pieces of information:
- Cost Price ($): Enter the total amount it costs you to acquire the unit. This should include the purchase price from your supplier plus shipping, duties, or manufacturing costs.
- Desired Markup (%): Enter the percentage you wish to add to your cost. For example, standard retail markup (keystone pricing) is often 100%.
Example Calculation
Let's say you run a boutique and you purchase designer sunglasses from a distributor.
- Your landed **Cost Price** per pair is **$65.00**.
- You want to achieve a typical retail markup of **120%**.
By inputting these values into the calculator:
- Enter 65 into the "Cost Price" field.
- Enter 120 into the "Desired Markup" field.
- Click "Calculate Price".
The results will show that your markup amount is $78.00 ($65.00 × 1.20). Your final Selling Price should be $143.00. The calculator will also indicate that this results in a Gross Margin of approximately 54.55%.