Markup Calculator

How to Calculate Markup

Markup is the percentage added to the cost of a product to determine its selling price. It is one of the most fundamental concepts in retail, wholesale, and business pricing. Understanding markup helps businesses set profitable prices while remaining competitive.

The Markup Formula

Selling Price = Cost × (1 + Markup% / 100)

Markup% = ((Selling Price - Cost) / Cost) × 100

Markup vs. Margin: The Key Difference

Markup and margin are often confused but use different bases. Markup is calculated on cost; margin is calculated on selling price. A product that costs $40 and sells for $100 has a 150% markup but only a 60% margin. The formulas:

• Markup = (Price - Cost) / Cost × 100 = ($100 - $40) / $40 × 100 = 150%
• Margin = (Price - Cost) / Price × 100 = ($100 - $40) / $100 × 100 = 60%

Industry Markup Benchmarks

Average markups vary widely by industry: grocery stores operate on thin 5-25% markups, clothing retail averages 50-100%, restaurants mark up food 200-400%, and jewelry can carry 100-300% markups. High-volume, low-markup businesses like grocery stores rely on volume to generate profit.

Converting Between Markup and Margin

Markup to margin: Margin = Markup / (1 + Markup/100). Margin to markup: Markup = Margin / (1 - Margin/100). For example, 50% markup = 33.3% margin. 50% margin = 100% markup.