How markup works
Markup answers a simple question: how much did you add on top of what the item cost you? You take the profit — the price minus the cost — and express it as a percentage of the cost. That last word is the whole game. Because markup divides by cost rather than by the selling price, it always produces a larger percentage than the margin for the same sale. Price off the wrong one and you can quietly leave profit on the table, which is why this calculator keeps cost, price, profit, markup, and margin visible side by side.
The markup formula
Markup % = (Price − Cost) ÷ Cost × 100
The numerator (price minus cost) is your profit; dividing by cost is what makes this a markup rather than a margin. For a $40 cost sold at $60: (60 − 40) ÷ 40 × 100 = 50% markup. To go the other way, price = cost × (1 + markup), so a 50% markup on $40 gives a $60 price.
What makes this calculator different
- Markup and margin together. Every result shows both ratios at once, so you can see exactly why the markup is the bigger number and never confuse the two.
- Price from a target markup. Start from a markup you want to hit and the calculator works backward to the selling price using price = cost × (1 + markup).
- Measured against cost, made obvious. The breakdown makes the base of the calculation explicit, so it’s clear the markup is a percentage of cost rather than of the price.
- Shareable. Every scenario lives in the URL, so you can send a pricing comparison to a partner or save it for later.
Frequently asked questions
What is markup and how do I calculate it?+
Markup is the amount you add on top of what a product costs you in order to set its selling price, expressed as a percentage of the cost. The formula is markup = profit ÷ cost × 100, where profit is simply price minus cost. If an item costs you $40 and you sell it for $60, your profit is $20 and your markup is $20 ÷ $40 × 100 = 50%. Enter your cost and price above and the calculator returns the markup instantly.
What is the difference between markup and margin?+
They describe the same dollar of profit but measure it against different bases. Markup is profit divided by cost, while margin is profit divided by the selling price. Because cost is always smaller than the price, dividing by the smaller number makes the markup percentage larger — so for the same sale, the markup is always a bigger number than the margin. A $20 profit on a $60 sale that cost $40 is a 50% markup but only a 33.3% margin.
How do I set a price from a target markup?+
Multiply your cost by one plus the markup expressed as a decimal: price = cost × (1 + markup). For a 60% markup on a $40 cost, the price is $40 × 1.60 = $64. This is the most common way retailers and wholesalers price goods, because they start from a known cost and add a consistent percentage. Use the "from markup" mode of the calculator to work this out in reverse from any target.
What is a typical or keystone markup?+
Typical markups vary widely by industry, product, and how much value a business adds, so there is no single "right" number. A well-known reference point is keystone markup, which means a 100% markup — doubling the cost to set the price. Many retailers use keystone as a simple starting point and then adjust up or down for demand, competition, and overhead. Treat any rule of thumb as a baseline rather than a target.
Does a 100% markup mean 100% profit?+
No. A 100% markup means you doubled the cost, but that does not mean the price is all profit. If an item costs $40 and you mark it up 100% to $80, your profit is $40 — which is half of the $80 selling price, so your margin is 50%, not 100%. Markup and margin are different ratios, and confusing them is one of the most common pricing mistakes. A 100% markup always equals a 50% margin.
Disclaimer: This calculator is for educational purposes only. The markup and margin figures it produces are gross — they reflect cost and price alone, before operating costs, overhead, taxes, and other expenses. It is not financial advice.