Markup Calculator
Price an item from a target markup, or work out the markup on a price you already charge. Every result comes with the matching profit margin, so you can see the sale from both sides.
Profit margin is always the smaller of the two numbers on a profitable sale: the same profit dollars measured against the full selling price instead of just the cost.
Formula and calculation
Worked example
An item that costs $25 priced with a 100% markup sells for $50.00: the markup adds $25.00, which works out to a 50% profit margin. The margin is the smaller of the two percentages because it is measured against the selling price instead of the cost.
What a markup does not cover
A markup on the product cost is not the same as profit. Rent, shipping, payment fees, returns and the promotions you actually run all have to fit inside it. A 50% markup on a $20 item adds $10; after a 15% discount and $2 of fees, much less than $10 reaches the bottom line. That is why many retailers mark up from a landed cost — goods plus freight and duties — instead of the invoice price alone, and why the markup tables here are a starting point for a pricing decision, not the decision itself.
What the results mean
- Selling price
- The price to charge: the cost plus the markup in the first mode, or the price you entered when working backwards. It is what the customer pays.
- Markup amount
- The markup in dollars per sale — profit added on top of the cost. Selling price minus cost, so it goes negative if you priced below cost.
- Markup
- Profit as a share of the cost. You enter it in the first mode; in the second mode the calculator derives it from the cost and the price.
- Profit margin
- The same profit as a share of the selling price — the number accounting calls margin. A 100% markup is a 50% margin, because the profit is measured against the full price instead of the cost.
Frequently asked questions
How do I calculate a selling price with a 40% markup?
Multiply the cost by 1.40. An item that costs $12 sells for $16.80 — a $4.80 markup, which is a 28.6% profit margin, not 40%, because margin measures the same profit against the price rather than the cost.
What is keystone pricing?
Doubling the cost — a 100% markup. A $25 item sells for $50. Keystone is a long-standing retail convention, common in jewelry, apparel and gift shops, and it leaves a 50% margin, not 100%: the profit is half of the price but all of the cost.
How is markup different from margin?
Markup measures profit against the cost; margin measures the same profit against the selling price, so they are never the same number. This page is built for the pricing direction — cost plus a target markup in, price out — and the margin calculator covers the margin direction, including the full conversion table between the two.
Is a 50% markup a 50% profit margin?
No. A 50% markup on a $40 cost gives a $60 price, which is a 33.3% margin. The two only match when the profit is zero, and the gap grows as the markup rises — at a 100% markup the margin is exactly half the markup.