Markup Calculator
Calculate markup percentage, profit margin, and pricing for your products. Understand the difference between markup and margin to set profitable prices.
Markup Calculator
Calculate markup percentage, profit margin, and pricing for your products. Understand the difference between markup and margin to set profitable prices.
Generated: 2/22/2026, 12:32:13 AM | AskSMB.io
Calculate Markup & Margin
Input Values
Cost to produce or purchase the product
Price charged to customers
Enter cost and selling price to see results
Cost price must be greater than zero
How the Markup Calculator Works
What is markup?
Markup is the percentage added to your cost to arrive at your selling price. It represents how much you're increasing the cost to determine your price. Markup is always calculated based on your cost price.
What is profit margin?
Profit margin (or margin) is the percentage of the selling price that is profit. Unlike markup which is based on cost, margin is based on the selling price. This is why margin is always lower than markup for the same transaction.
Markup vs margin explained
These terms are often confused but represent different perspectives. Markup asks: "How much am I adding to my cost?" Margin asks: "What percentage of my selling price is profit?" For a $100 product sold at $150: Markup = 50% ($50 markup on $100 cost). Margin = 33.33% ($50 profit on $150 selling price).
Why markup matters for pricing
Markup ensures you cover costs and generate profit. Different industries have different standard markups based on overhead costs, competition, and customer expectations. Understanding your markup helps you price competitively while maintaining profitability. Too low, and you won't cover expenses. Too high, and you may lose customers to competitors.
How to set the right markup
Consider these factors when setting markup: (1) Calculate all your costs including overhead, (2) Research competitor pricing, (3) Understand your target customer's price sensitivity, (4) Factor in your desired profit margin, (5) Consider market positioning (premium vs budget), (6) Account for volume - higher volume may allow lower markup, (7) Review and adjust regularly based on market conditions.
Formula
Where:
- Markup %=(Selling Price - Cost Price) / Cost Price × 100
- Margin %=(Selling Price - Cost Price) / Selling Price × 100
- Markup Amount=Selling Price - Cost Price
Example Scenario
Markup Amount = $60 - $40 = $20
Tips & Best Practices
- •Retail typically uses 50-100% markup (keystone pricing doubles cost)
- •Margin is always lower than markup - don't confuse the two
- •High-overhead businesses need higher markup to stay profitable
- •Track both markup and margin to understand pricing from all angles
- •Industry standards vary - research your specific market
- •Premium brands can command higher markup through perceived value
Frequently Asked Questions
Related Tools
💡 Quick Tips
- •All calculations happen in your browser - your data is private
- •Results update in real-time as you type
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