Markup Calculator
Determine product selling price, unit gross profit, and equivalent margins based on cost and markup.
Unit Cost: $100.00 plus $50.00 markup.
How is this calculated?
P = C × (1 + M / 100)Profit = P - CMargin = (Profit / P) × 100- Assumes unit wholesale costs do not change between order placing and final customer sale.
- Ignores sales tax, shipping fees, or multi-buy bundle options at pricing calculation.
- Does not calculate target volume required to break even.
- Does not account for general overheads (rent, marketing, salaries) which affect net profits.
About the Markup Calculator
A markup calculator turns a cost into a selling price. Enter what an item cost you and the percentage you want to add, and it returns the price, the gross profit per unit, and the gross margin that price implies. Markup is the number most retailers actually price with, because it works forwards from the invoice in front of them: multiply cost by a factor and you have a price tag. Margin works backwards from the price and is the number accountants and investors read. Both describe the same profit, and they are almost never the same percentage. The practical danger runs in one direction. Markup always looks larger than the margin it produces, so pricing by markup and reporting by margin means every product appears less profitable than it felt at the point of pricing. A 25% markup is a 20% margin. A 50% markup is a 33.33% margin. Only at 100% markup - what the trade calls keystone, simply doubling the cost - do you reach a 50% margin. The table below pairs each markup with the margin it really delivers, and with what a routine 10% discount leaves behind.
Mathematical Formula & Logic
Step-by-Step Example
A distributor buys at $80.00 and applies a 25% markup. 1. Inputs: Cost = $80.00, Markup = 25%, or 0.25. 2. Selling price: 80.00 x 1.25 = $100.00. 3. Gross profit: 100.00 - 80.00 = $20.00. 4. Resulting margin: 20.00 / 100.00 = 20.00%. So a 25% markup yields a 20% margin. If the business had been told to hit a 25% margin and applied a 25% markup instead, it would have priced at $100.00 when it needed $106.67 - short by $6.67 on every unit, or 6.67% of revenue. Now discount that $100.00 price by 10% for a promotion. 5. New price: $90.00. 6. New profit: 90.00 - 80.00 = $10.00. 7. New margin: 10.00 / 90.00 = 11.11%. The price fell 10% and the profit halved. To finish the promotion with the same total gross profit the distributor must sell twice the units. The extreme case is worth seeing plainly. Take a 10% markup: cost $100, price $110, profit $10. Apply the same 10% discount and the price becomes $99.00 - a dollar below what the stock cost. Every additional unit sold during that promotion deepens the loss. The break-even point is a markup of exactly 11.11%, because 0.9 x 1.1111 = 1.00. Any markup thinner than that cannot absorb a tenth off the price, which is the arithmetic behind the old retail instinct that low-markup lines should be promoted on volume terms rather than discounted.
Reference Data & Values
| markup | price at $100 cost | profit | margin it gives | profit after 10% off | profit lost |
|---|---|---|---|---|---|
| 10% | $110.00 | $10.00 | 9.09% | -$1.00 | 110% |
| 25% | $125.00 | $25.00 | 20.00% | $12.50 | 50% |
| 33.33% | $133.33 | $33.33 | 25.00% | $20.00 | 40% |
| 50% | $150.00 | $50.00 | 33.33% | $35.00 | 30% |
| 100% | $200.00 | $100.00 | 50.00% | $80.00 | 20% |
| 200% | $300.00 | $200.00 | 66.67% | $170.00 | 15% |