Business calculators
Markup Calculator
Measure how much a selling price sits above the item or service cost. Your inputs stay in this browser.
Live calculator
Enter your numbers
What this calculator measures
Markup answers a construction question: starting from a known cost, how far above that cost is this price? Use it when you land a bottle, a subcontractor invoice, or a freight-inclusive kit and need a selling number — not when you want to know what share of a sale you keep. That second question is margin.
The metric is misleading when the cost is incomplete or when you treat the percentage as profit. A 80% markup on a $6.40 factory quote looks generous until freight, breakage, and payment fees put true landed cost at $8.10. It is also misleading across channels. The same 80% on a cafe wholesale pack and a direct-to-consumer single produces two different unit prices; buyers compare packs, not your internal percentage.
The common manual mistake is to add a target margin to cost and call it markup. A $80 cost and a 40% target margin needs $80 ÷ 0.60 = $133.33, which is a 66.7% markup. Adding 40% produces $112 — a 40% markup and only a 28.6% margin. People then hit their '40%' and still cannot cover overhead.
Tess sells refillable bottles. Landed cost on the 750 ml is $6.40. She wants $3.50 of overhead recovered at 1,200 units and $1.10 of slack, so price is $11.00. Markup is ($11.00 − $6.40) ÷ $6.40 = 71.9%. Margin on the same pair is 41.8%. Keystone (100% markup, $12.80) lost the cafe room because a catalog four-pack was cheaper per milliliter. The 71.9% is not conservative or aggressive until she checks that unit comparison and whether 1,200 bottles actually ship.
Formula
Inputs and variables
- Selling price
- Enter the money amount used by this formula.
- Cost
- Enter the money amount used by this formula.
How to use the calculator
- Choose a display currency when money fields are present.
- Enter values that cover the same period, scope, and currency.
- Review the result, formula, and worked example before using the estimate in a decision.
- Change one assumption at a time to understand what drives the result.
Worked example
- 1Tess's bottle costs $6.40 landed and sells for $11.00.
- 2($11.00 - $6.40) / $6.40 x 100 = 71.9% markup.
- 3The same price is a 41.8% margin. A 100% markup ($12.80) failed the buyer's per-ml comparison.
How to interpret the result
Markup is a pricing tool on the cost you entered. It is not a profit report and it is not proof buyers will pay. Convert a target margin with cost ÷ (1 − margin). Then check unit price on the pack the buyer actually compares.
Common mistakes and limits
- Using revenue as the denominator (that is margin).
- Adding a target margin to cost instead of dividing cost by one minus the margin.
- Leaving freight, fees, or breakage out of landed cost.
- Averaging two channels into one markup when buyers see two different packs.
Frequently asked questions
Is a 50% markup the same as a 50% profit margin?
No. Markup divides the dollar gap by cost; margin divides it by price. A $100 cost and $150 price is a 50% markup and a 33.3% margin. If you need a 50% margin, the price is $200, which is a 100% markup.
What markup do I need to cover rent and ads?
Put overhead on a per-unit basis using volume you have already sold, add it to landed cost, then add the profit you want to keep. The resulting price versus cost is the markup. A traditional 100% (keystone) only works if that price still sells and the volume is real.
Why did buyers reject my price if the markup looks normal?
They compare unit price, not your percentage. A 100% markup on a 750 ml bottle can lose to a cheaper four-pack of 500 ml on a per-ml basis. Run unit price on the pack they open in another tab before you defend the markup.
Should wholesale and retail use the same markup?
Usually not. Wholesale often needs a lower markup to clear a buyer's own margin, while retail has to carry ads and returns. Blend them into one average and you will either lose the cafe or give away the website. Price each channel, then check margin on the one that has to carry its own costs.
Can I use markup to set a price from a target margin?
Yes, but do not add the margin percentage to cost. Price = cost ÷ (1 − target margin). Then this calculator will show the matching markup. Adding 40% to cost is a 40% markup, not a 40% margin.