What is the difference between markup and margin?

Markup is profit measured as a percentage of cost, while margin is profit measured as a percentage of the selling price. A 50% markup does not equal a 50% margin — a 50% markup actually gives roughly a 33% margin.

How do you calculate selling price from markup?

Multiply your cost by the markup percentage, then add that amount to the cost. The formula is Selling Price = Cost + (Cost × Markup %).

What is a typical markup percentage?

There is no universal typical markup. Markups vary widely by product, channel, and market: grocery items may use a relatively low markup, while clothing and restaurant food are often marked up by a much larger percentage. Choose a markup that covers your costs and delivers a healthy margin for your specific business, rather than copying a generic figure.

Markup Calculator - Free Selling Price Calculator

Q: What is a markup calculator?

A markup calculator determines your selling price and profit when you know your product cost and the markup percentage you want to add. It is essential for retailers, online sellers and anyone who buys products to resell.

What is a markup calculator?

A markup calculator helps you set the right selling price for a product by adding a chosen markup percentage on top of what the item costs you. It is one of the most useful pricing tools for online sellers, retailers, wholesalers and any small business that buys products and resells them at a profit. Enter your cost and desired markup, and the calculator instantly shows your selling price, your profit per unit, and the resulting profit margin.

Correct pricing is the difference between a business that grows and one that quietly loses money. Set your markup too low and you will not cover overhead; set it too high and you may price yourself out of the market. This tool lets you experiment with different markups in seconds so you can find the sweet spot.

How the markup calculator works

You provide two numbers: the product cost and the markup percentage. The calculator multiplies the cost by the markup to find your profit, adds it to the cost to find your selling price, and then converts that profit into a margin percentage so you can compare it directly with your target margin.

Markup formula

Selling Price = Cost + (Cost × Markup %)
Profit = Cost × Markup %

Example calculation

Say a product costs you $50 and you apply a 40% markup. Your profit is $50 × 40% = $20, so your selling price becomes $50 + $20 = $70. That $20 profit on a $70 sale works out to a profit margin of about 28.6%.

The difference between markup and profit margin

This is one of the most common sources of confusion in small business pricing. Markup is your profit measured against your cost, while marginis your profit measured against your selling price. Because the denominators differ, the two percentages are never the same for the same sale.

A 25% markup equals a 20% margin.
A 50% markup equals a 33% margin.
A 100% markup equals a 50% margin.

Understanding this relationship prevents you from accidentally underpricing. When someone says they want a "50% margin," applying a 50% markup will leave you short — you would actually need a 100% markup. Use this calculator alongside our profit margin calculator to keep both numbers in view.

Methodology & Accuracy

How this calculator produces its results, and the limits you should keep in mind when using them.

Formula source

The result is produced by the exact mathematical formula shown on this page. The formula is derived from the definition of the relationship between the inputs and the output (for example, profit margin is profit divided by revenue by definition). Where a formula relies on an external rule, rate, or convention, the authoritative source supporting that claim is linked in the Sources section below. The calculation has not been certified or approved by any professional body.

Assumptions

Calculations assume the figures you enter are accurate and apply to your situation. These are simplified models that may not capture every business scenario, and the estimates depend entirely on the values you select.

Uncertainty and limitations

Results are estimates based on the information entered. Actual financial outcomes may differ depending on business circumstances, market conditions, taxes, location, and other factors.

Tested with sample inputs

Tested with $50 cost and a 40% markup: selling price $70 and $20 profit — matching the worked example on this page.

Ownership and testing

This calculator is maintained by Small Business Finance Toolkit. Its calculation can be checked using the sample figures shown on this page. It has not been certified or reviewed by a licensed financial professional. Found an error or outdated information? Contact us.

Review status

Sample checks are described above where available. A complete claim-by-claim publisher review is still pending.

Markup Calculator