Markup Calculator

How to use the markup calculator

1. Pick what you know. The most common case is cost plus a markup percentage. You can also enter a cost and a price to see the markup you are charging, a cost and the margin you want, or a price and a markup to find the original cost.
2. Enter your cost per unit. Use the full cost of getting one unit ready to sell: the wholesale price plus inbound shipping, packaging or materials. Anything you leave out of the cost will quietly eat into the profit.
3. Enter the markup or margin. The chips fill in common values, including the 100% keystone markup many retailers start from.
4. Optional: add units. Type how many you expect to sell to see total revenue and gross profit.

The results show markup and margin side by side every time, because confusing the two is the classic pricing mistake: a 50% markup is not a 50% margin.

Markup formula

Worked example. Penn State Extension prices an item that costs $5.00 with a 30% markup: $5.00 × 1.30 = $6.50. The profit is $1.50 per unit. As a share of the $6.50 price, that profit is $1.50 ÷ $6.50 = 23%, so a 30% markup produces a 23% gross margin.

Pricing for a margin. Mississippi State University Extension sets prices from a target gross margin instead. With a cost of goods sold of $2.25 and a 40% margin, the price is $2.25 ÷ (1 − 0.40) = $2.25 ÷ 0.60 = $3.75. The markup on that price works out to $1.50 ÷ $2.25 = 66.7%.

Markup vs. margin

Both describe the same dollar profit. The difference is what you divide it by. Markup divides the profit by the cost; margin divides it by the selling price. The University of Maine Cooperative Extension uses a $1.00 item sold for $1.50: the 50¢ profit is a 50% markup on cost but only a 33⅓% margin on price.

That gap grows as prices rise. Use this table to convert between the two:

Markup has no upper limit, but margin cannot reach 100%, since that would mean the item cost nothing. If someone quotes you a “100% margin”, they almost certainly mean a 100% markup.

Keystone pricing and common markups

Nebraska Extension describes the most common retail rule of thumb: the retail price is often twice the wholesale price, a 100% markup known as keystone pricing. It is quick, and it leaves a 50% gross margin to cover rent, staff, card fees and returns before any profit is left.

Keystone is a starting point, not a law. Fast-moving or easily compared products often carry less, while slow sellers, made-to-order items and products with a lot of handling often carry more. The right markup is one that covers your full costs and still matches what customers will pay, which is why extension guides recommend checking competitors’ prices alongside your own numbers.

What to include in “cost”

A markup is only as good as the cost under it. For a reseller, cost is usually the landed cost: what you paid the supplier plus freight in, duties and any packaging you add. For a maker, it is the cost of goods sold: materials, direct labor and the supplies used per unit.

Overhead such as rent, insurance, software and your own salary is usually not part of the unit cost. Instead, the markup has to be large enough that the total gross profit across all your sales covers it. The University of Maine bulletin makes the same point: the price must cover the item, the selling and operating expenses, and still leave a profit.

Marketplace and payment fees are often charged as a percentage of the price. If yours are significant, price with the target-margin mode and add the fee percentage to the margin you need: a 30% target margin plus a 10% fee means pricing for a 40% margin.

Checking a markup against your overhead

A markup can look healthy per item and still lose money over a month. A quick check is to divide your fixed monthly costs by the number of units you expect to sell. That is the gross profit each unit has to earn before you make anything at all.

Say your rent, software, insurance and other fixed costs come to $3,000 a month and you expect to sell 600 units that cost you $20 each. Each unit has to bring in $3,000 ÷ 600 = $5 of gross profit just to cover the month, which is a 25% markup. At a 50% markup you earn $10 per unit: $5 covers the overhead and $5 is left over, a $3,000 monthly profit before tax. At 20% you would earn $4 per unit and fall $600 short.

Mississippi State Extension separates costs the same way: variable costs that rise with every unit, such as materials and packaging, belong in the cost you enter here, while fixed costs such as rent and insurance are what the gross margin has to pay for. If your sales volume is uncertain, run the check at a low and a high estimate to see how much room the markup leaves.

Reverse markup: finding the cost behind a price

To find what an item cost before a known markup, divide the price by one plus the markup. A $130 price with a 30% markup came from a cost of $130 ÷ 1.30 = $100. A common mistake is to take 30% off the price, which gives $91 and understates the cost by $9.

The same division applies to anything that was added as a percentage of a base, which is why the calculator’s fourth mode asks for the price and the markup rather than a discount.

Sources & assumptions

How this calculator gets its numbers. Full method: our methodology.

• Markup is measured on cost: (price − cost) ÷ cost. Margin is measured on price: (price − cost) ÷ price.
• “Cost” is whatever you enter: unit cost, landed cost or cost of goods sold. The calculator does not add overhead, shipping or fees unless you include them in the cost.
• A margin must be below 100%; there is no upper limit on markup.
• Results are shown to the cent; a real price may be rounded to a price point such as $X.99.
• No sales tax is included.

Sources

1. University of Maine Cooperative Extension, Bulletin #3000, Basic Pricing Strategies for Small Businesses. Markup on cost versus markup on selling price (margin), and the $1.00 cost / $1.50 price example: 50% markup, 33⅓% margin.
2. Penn State Extension, What’s the Difference Between Markup and Profit?. Price = cost × markup + cost; a $5.00 unit cost with a 30% markup sells for $6.50, a 23% gross margin.
3. Mississippi State University Extension, Product Pricing and Breakeven Concept (P3671). Selling price = cost of goods sold ÷ (100% − desired gross margin); $2.25 at a 40% margin is $3.75.
4. Nebraska Extension, Introduction to Pricing for a Product or Service (EC496). Retail price is often twice the wholesale price, a 100% markup known as keystone pricing.
5. U.S. Chamber of Commerce, CO—, How to Price Your Product for Profit and Growth. Price = total variable costs ÷ (1 − target margin); a $10 cost sold at $12.50 is a 20% margin.

Last reviewed November 2, 2026. These are pricing formulas, not financial or tax advice; your own costs and market decide the right price.