Price from cost the way most owners do — and see the margin that markup actually leaves you.
Markup calculator
Free, no sign-up ·
$
%
How much you add on top of the cost
Selling price
8.00
Profit per item
3.00
Margin this gives you
37.5%
A markup is measured on cost; a margin on the price. They are never the same number.
Markup is profit divided by cost; this calculator turns a cost and a markup into a selling price and shows the margin that price actually delivers.
How markup is calculated
| Figure | Formula |
|---|---|
| Selling price | Cost × (1 + Markup %) |
| Profit | Price − Cost |
| Margin from markup | Markup ÷ (1 + Markup) |
| Markup from margin | Margin ÷ (1 − Margin) |
A 100% markup doubles the cost: an item bought for $5 sells for $10, and the margin is 50%, not 100%. A 50% markup on the same item gives a price of $7.50 and a margin of only 33%. Use the profit margin calculator to work from the margin you need instead.
Questions
- How do I calculate a selling price from a markup?
- Multiply the cost by one plus the markup. A 60% markup on an item that costs $5 gives a price of $5 × 1.6 = $8.
- Is a 50% markup the same as a 50% margin?
- No. A 50% markup gives a 33.3% margin; a 50% margin needs a 100% markup.
- How do I convert margin to markup?
- Divide the margin by one minus the margin. A 40% margin is a markup of 0.40 ÷ 0.60 = 66.7%.
- Should I price by markup or by margin?
- Margin is safer for planning because your costs and profit targets are usually stated as a share of sales; markup is quicker at the shelf. Either works if you know how they convert.
Keep reading
- Free toolProfit margin calculatorFree profit margin calculator: enter cost and price to get profit, margin and markup — or enter a target margin to get the price to charge. Formula shown.
- GlossaryMarkupMarkup is the percentage you add to cost to set a price. The formula, how to price from a target margin, a worked example and the mistakes that cost money.
- GlossaryGross profit marginGross profit margin is the share of each sale left after the cost of the goods. See the formula, a worked example, margin vs markup, and common mistakes.
- GuideHow to calculate profit margin (and price for it)Profit margin is profit divided by revenue. Learn the margin and markup formulas, how to price for a target margin, and the mistakes that quietly cost money.
- FeatureInventoryFree, browser-based inventory software: stock that drops with every sale, adjustments with a reason, low-stock alerts and suggested reorder quantities.
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