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Calculation Machine

Markup Calculator

Set a selling price from cost and target markup.

Reviewed by the Calculation Machine team · Updated 24 October 2026 · How we check our maths

Your values

ⓘ Live results

Results
Selling price
$38.40
Profit per unit
$14.40
Resulting margin
37.5%

Working

  1. 1Price = $24.00 × (1 + 0.6) = $38.40

Quick answer

Markup is the profit added to cost, expressed as a percentage of cost. Selling price = cost × (1 + markup ÷ 100). An item that costs $24 with a 60% markup sells for $24 × 1.6 = $38.40, earning $14.40 per unit. Because margin divides that profit by the higher selling price, a 60% markup is only a 37.5% margin.

What the Markup calculator does

This calculator sets a selling price from what an item costs you and the markup you want, then shows the profit per unit and the profit margin that price produces. It suits retailers pricing stock, wholesalers and makers setting trade prices, and contractors adding overhead and profit to a job.

The most common pricing mistake is treating markup and margin as the same number. They are calculated on different bases, so a markup always looks bigger than the margin it delivers. If you are working from a target margin instead, use the profit margin calculator or convert with the table below.

Unit cost should be your landed cost — the purchase price plus inbound shipping, duties and packaging — so that the markup covers real costs. The result is a cost-plus price; check it against what competitors charge and what customers will pay before using it.

The formula

Price = Cost × (1 + Markup) Profit = Price − Cost Margin = Profit ÷ Price = Markup ÷ (1 + Markup)

Formula variables
SymbolMeaningUnit
CostLanded cost of one unit: purchase or production cost plus freight, duty and packaging$
MarkupProfit as a fraction of cost (60% = 0.60)—
PriceSelling price before sales tax or VAT$
MarginProfit as a fraction of selling price—

This is cost-plus pricing, the standard method in retail, wholesale and contracting. To go the other way, markup = margin ÷ (1 − margin): a 40% target margin needs a 66.7% markup.

Keystone pricing is a 100% markup (price = 2 × cost), which gives a 50% margin. Wholesalers use the same formula on their production cost to set a trade price, and retailers then apply their own markup to that trade price.

Worked examples

Keystone pricing in a gift shop

A boutique buys candles at $12.50 each, landed, and applies the traditional keystone markup of 100%.

Inputs

  • Unit cost12.50 $
  • Markup100 %

Result

  • Selling price$25.00
  • Profit per unit$12.50
  • Resulting margin50%

Price doubles to $25.00, giving a 50% margin and $12.50 profit per candle. If the shop expects to mark slow stock down later, it may need more than keystone on its initial price.

Contractor adding 20% to a job

A remodeler's materials, labor and subcontractors for a kitchen come to $18,000, and they add a 20% markup for overhead and profit.

Inputs

  • Unit cost18000 $
  • Markup20 %

Result

  • Selling price$21,600.00
  • Profit per unit$3,600.00
  • Resulting margin16.67%

The bid is $21,600, but the margin is only 16.67%. A contractor whose overheads run at 15% of revenue is left with very little profit, which is why many contractors price from a target margin rather than a markup.

Wholesale price for a maker

A small brand's product costs $40 to make and ship to the warehouse; it sells to retailers with a 35% markup.

Inputs

  • Unit cost40 $
  • Markup35 %

Result

  • Selling price$54.00
  • Profit per unit$14.00
  • Resulting margin25.93%

The wholesale price is $54.00, a 25.93% margin. If the retailer then applies keystone, the shelf price becomes $108, so the maker should check that end price is competitive.

Markup to margin conversion table

Use this to translate between the markup you apply and the margin you report. Margin = markup ÷ (1 + markup).

Equivalent markup and margin percentages
Markup on costMargin on pricePrice for a $100 cost
20%16.7%$120
25%20.0%$125
33.3%25.0%$133.33
50%33.3%$150
66.7%40.0%$166.67
100% (keystone)50.0%$200
150%60.0%$250
200%66.7%$300

Choosing a markup for your situation

  • Retail: start from the margin you need to cover rent, staff and markdowns, then convert it to a markup. Fast-moving, price-compared goods support lower markups than gifts, fashion or specialist items.
  • Wholesale and distribution: markups are usually lower than retail because volume is higher and the retailer still needs room for its own markup.
  • Contracting: include overhead as well as profit. Many contractors list overhead and profit separately in a bid; the combined figure is the markup to enter here.
  • Ecommerce: marketplace and payment fees come out of the selling price, so include them in cost or use the ecommerce profit calculator to see what is left.

Markup mistakes that cost money

  • Quoting markup as margin. Telling a client you work on a 25% margin when you actually add 25% to cost means your real margin is 20%.
  • Marking up the purchase price only. Freight, duty and packaging belong in cost; leaving them out shrinks the real markup.
  • Ignoring discounts. A 20% sale on a 50% markup item leaves a price of 1.2 × cost, a 16.7% margin.
  • Using one markup for everything. Items with high returns, breakage or storage costs need a larger markup than easy, fast sellers.

How to use the Markup Calculator

  1. 1Enter the unit cost — what you pay per item including inbound shipping, duty and packaging.
  2. 2Enter the markup percentage you want to add to cost (100 for keystone, doubling the cost).
  3. 3Read the selling price, the profit per unit and the margin that price produces.
  4. 4If the margin is below your target, raise the markup and check the new price against competitors.

Frequently asked questions

How do I calculate markup percentage?

Subtract cost from selling price, divide by cost and multiply by 100. An item bought for $24 and sold for $38.40 has a markup of $14.40 ÷ $24 = 60%.

Is a 50% markup the same as a 50% margin?

No. A 50% markup gives a 33.3% margin; you need a 100% markup to reach a 50% margin.

What is keystone pricing?

Keystone pricing means doubling the wholesale cost to set the retail price — a 100% markup and a 50% margin. It is a traditional starting point in retail, not a rule.

How do I convert a margin to a markup?

Divide the margin by (1 − margin). A 30% margin needs a markup of 0.30 ÷ 0.70 = 42.9%.

Can markup be more than 100%?

Yes. Markup is measured against cost, so any price more than double the cost has a markup above 100%. Margin, by contrast, can never reach 100% unless the cost is zero.

References

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