Markup Calculator
Find the selling price from what something costs and the markup you add, and see the profit margin that price gives you.
Profit margin
≈ 33.33%
Buying at $80.00 and selling at $120.00 gives a margin of about 33.33% and a markup of 50%.
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Why does this work?
All steps as text
Tip: press ← and → to move between steps, or click any step.
How to calculate a markup price
A 50% markup on something that costs $80: $80 × 1.5 = $120. The markup is the profit as a share of the cost: $40 ÷ $80 = 50%.
To find the markup you are already using, divide the profit by the cost: selling at $26.99 what cost $19.99 is a markup of $7 ÷ $19.99 ≈ 35%.
Keystone pricing: a 100% markup
Many shops double the wholesale cost, called keystone pricing. A 100% markup turns a $40 cost into an $80 price, which is a 50% margin: half of every sale pays for the goods and half is gross profit.
Markup to margin
The margin is always smaller than the markup, because it divides the same profit by the bigger number, the price.
| Markup | Margin | Markup | Margin |
|---|---|---|---|
| 10% | 9.09% | 60% | 37.5% |
| 20% | 16.67% | 75% | 42.86% |
| 25% | 20% | 100% | 50% |
| 30% | 23.08% | 150% | 60% |
| 40% | 28.57% | 200% | 66.67% |
| 50% | 33.33% | 300% | 75% |
To convert: margin = markup ÷ (1 + markup), and markup = margin ÷ (1 − margin).
Questions
What is the difference between markup and margin?
Both measure the same profit. Markup compares it with the cost; margin compares it with the selling price. A $40 profit on an $80 cost and a $120 price is a 50% markup and a 33.33% margin.
Should I add sales tax or VAT before or after the markup?
Usually after: work out your price from the cost and markup, then add the tax on top for the price the customer pays. Use the VAT calculator for that step.
How do I calculate markup in Excel?
With the cost in A2 and a 50% markup: =A2*(1+50%) gives the price. With the cost in A2 and the price in B2, the markup is =(B2-A2)/A2.
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