Markup Calculator - Calculate Sale Price, Markup %, and Profit

What Is the Markup Definition?

The basic rule of a successful business model is to sell a product or service for more than it costs to produce or provide it. Markup (or markon) is the ratio of the profit made to the cost paid. As a general guideline, markup must be set in such a way as to be able to produce a reasonable profit. Profit is the difference between the revenue and the cost.

For example, when you buy something for $80 and sell it for $100, your profit is $20. The ratio of profit ($20) to cost ($80) is 25%, so 25% is the markup.

What Is the Difference Between Margin and Markup?

These two terms are often confused, but they are fundamentally different:

• Markup is the ratio of profit to cost.
• Profit margin is the ratio of profit to revenue (sale price).

Using our example above: profit is $20, cost is $80, revenue is $100.

• Markup = $20 / $80 = 25%
• Profit margin = $20 / $100 = 20%

The profit margin allows you to compare your profit to the sale price, not the purchase price. This is why margin is always lower than markup for the same transaction.

How Do I Calculate Markup?

This calculator supports three calculation modes:

1. Cost + Markup% → Sale Price:
   Enter your cost price and the desired markup percentage. The calculator finds your selling price.
2. Cost + Sale Price → Markup%:
   Enter both the cost and the selling price. The calculator finds the markup (and margin) percentage.
3. Sale Price + Markup% → Cost:
   Enter the selling price and markup percentage to find the original cost.

What Is the Markup Formula?

The core formulas are:

• Profit = Revenue − Cost
• Markup % = (Profit / Cost) × 100
• Sale Price = Cost × (1 + Markup% / 100)
• Cost = Revenue / (1 + Markup% / 100)
• Profit Margin % = (Profit / Revenue) × 100

A helpful relationship between markup and margin:
Margin % = Markup% / (100 + Markup%) × 100

Markup in Price Management

In retail and wholesale pricing, markup is a fundamental tool for ensuring profitability while remaining competitive. Price managers typically set markup targets based on:

• Operating expenses — rent, utilities, payroll, and other overhead costs that must be covered.
• Target profit margin — the desired net profit after all costs are deducted.
• Market competition — the prices competitors charge for similar products.
• Perceived value — what customers are willing to pay regardless of cost.

Markup by Specific Industries

Typical markup percentages vary significantly by industry:

• Grocery / Food retail: 5–25% — thin margins due to high volume and competition.
• Clothing / Apparel: 50–300% — high markups to cover design, branding, and seasonal risk.
• Electronics: 10–30% — moderate margins; high-ticket items may carry lower % but higher absolute profit.
• Jewelry: 50–100%+ — high perceived value supports large markups.
• Restaurants / Food service: 200–400% on food cost — industry standard to cover kitchen labor and overhead.
• Pharmaceuticals / Health: 10–1000%+ — varies widely by product type and regulation.
• Construction materials: 20–50% — markup on materials plus separate labor charges.
• Automotive parts: 25–100% — dealers and repair shops apply substantial markups.

Other Considerations

When setting markup, also consider:

• VAT / Sales tax: In some regions, sales tax or VAT is added on top of the selling price. Use our Sales Tax Calculator to factor this in.
• Discount strategy: Planning a future promotion? Use our Discount Calculator to ensure you still profit after a discount.
• Profit margin view: For a margin-first perspective, try our Margin Calculator.
• Volume pricing: Higher markup per unit may be offset by lower sales volume; always model total profitability.

Currency Support

This calculator supports 20 world currencies, including USD, EUR, GBP, JPY, CAD, AUD, CHF, CNY, BRL, MXN, INR, KRW, SEK, NOK, DKK, RUB, TRY, SGD, HKD, and NZD. All monetary values are displayed with the selected currency symbol.

References

• Horngren, C. T., Datar, S. M., & Rajan, M. V. (2015). Cost Accounting: A Managerial Emphasis. Pearson.
• Investopedia: Markup Definition
• Corporate Finance Institute: Markup vs. Margin

FAQs

What is a good markup percentage?

There is no universal "good" markup. It depends on your industry, cost structure, and competitive environment. A 50% markup (33% margin) is often cited as a healthy target for retail, but restaurants may need 300%+ on food cost to be profitable.

Can markup be negative?

Yes — if you sell a product below cost, the markup is negative, indicating a loss. This is sometimes done intentionally (loss-leader pricing) to attract customers.

Is markup the same as profit margin?

No. Markup is profit divided by cost; margin is profit divided by revenue. A 25% markup produces approximately a 20% margin.

How do I convert markup to margin?

Margin % = Markup% / (100 + Markup%) × 100.
Example: 25% markup → 25 / 125 × 100 = 20% margin.

How do I convert margin to markup?

Markup % = Margin% / (100 − Margin%) × 100.
Example: 20% margin → 20 / 80 × 100 = 25% markup.