Free marketing tool
Free Markup Calculator
Enter your cost and markup to get the selling price, or enter your cost and selling price to get the markup. The calculator shows your profit and margin too, so you can see markup vs margin side by side.
Live calculator
Calculate markup, price and margin
Selling price
$60.00
Profit of $20.00 per sale, a 33.33% margin.
- Profit
- $20.00
- Markup
- 50.00%
- Margin
- 33.33%
Formulas
Price = cost x (1 + markup)
Markup = (price - cost) / cost x 100
Margin = (price - cost) / price x 100
Margin to markup
| Margin | Markup needed |
|---|---|
| 20% | 25.00% |
| 25% | 33.33% |
| 30% | 42.86% |
| 40% | 66.67% |
| 50% | 100.00% |
What is markup?
Markup is how much you add on top of what a product costs you, shown as a percentage of that cost. If something costs you $40 and you add $20, your markup is 50%. Shops, resellers and service businesses use markup because it is a quick way to set a price from a known cost.
How to calculate markup
The formula is: markup = (selling price - cost) / cost × 100.
Example: a product costs $40 and sells for $60. The profit is $60 - $40 = $20. $20 / $40 = 0.5, times 100 is a markup of 50%.
To go the other way and set a price from a markup, use: price = cost × (1 + markup). A $40 cost with a 50% markup is $40 × 1.5 = $60.
Count every cost that comes with each sale: the product, shipping, packaging and payment fees. If you leave some out, the real markup is lower than the number you see.
Margin vs markup
Markup and margin use the same profit but divide it by different numbers. Markup divides profit by cost. Margin divides profit by the selling price. In the example above, the $20 profit is a 50% markup ($20 / $40) and a 33.33% margin ($20 / $60).
To convert between them, write both as decimals and use:
- markup = margin / (1 - margin)
- margin = markup / (1 + markup)
A 25% margin needs a 0.25 / 0.75 = 33.33% markup. A 100% markup gives a 1 / 2 = 50% margin. Markup is always higher than margin for the same product, and the gap grows as prices go up.
Common mistakes
The most common mistake is pricing with markup when you meant margin. Say you want a 30% margin, so you add 30% to a $100 cost and charge $130. Your profit is $30, but $30 / $130 is only a 23% margin. To get a real 30% margin you need a 42.86% markup and a price of $142.86.
The other common mistake is comparing numbers that are not the same kind. A supplier who quotes a 40% markup and a competitor who reports a 40% margin are not talking about the same profit. Check which one you are looking at before you compare.
From price to profit
Markup tells you what you make on one sale. To see what the whole store makes after ads, fees and refunds, use the Shopify profit margin calculator. If you pay for traffic, check that your margin covers ad spend with the ROAS calculator, and see how many visitors buy with the conversion rate calculator.
FAQ
How do you calculate markup?
Subtract cost from selling price, divide by cost and multiply by 100. A product that costs $40 and sells for $60 has a markup of 50%.
What is the difference between markup and margin?
Both use the same profit, but markup divides it by cost and margin divides it by selling price. A $40 item sold for $60 has a 50% markup and a 33.33% margin. Markup is always the bigger number.
What markup do I need for a 50% margin?
A 100% markup. Use markup = margin / (1 - margin): 0.5 / (1 - 0.5) = 1, so you double the cost. A $40 item sells for $80.
Can margin be 100% or more?
No. Margin is profit as a share of the selling price, so it stays below 100% unless the cost is zero. Markup has no upper limit: a 300% markup is a 75% margin.
See which pages turn visitors into buyers
PageDuel tracks visitors, purchases and revenue by page and campaign, then lets you A/B test prices and product pages to grow your margin.
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