Markup Calculator

Why Markup Matters

Markup pricing is essential for ensuring your business remains profitable. It helps you determine the right selling price by adding a percentage to your product cost. Understanding markup vs. margin helps you price competitively, cover overhead, and achieve desired profitability.

How to Use This Calculator

• Product Cost: Your cost to produce or purchase the item (materials, labor, shipping, etc.)
• Markup Percentage: The percentage you want to add to the cost to determine selling price
• Click "Calculate Markup" to see your selling price and profit margin

Formulas Used

Example: $50 cost with 30% markup → $50 + ($50 × 0.30) = $65 selling price
Profit Margin = ($65 - $50) / $65 × 100 = 23.08% margin

Markup vs. Margin

While often confused, markup and margin are different:

• Markup is the amount added to the cost price to determine selling price
• Margin is the percentage of the selling price that is profit
• A 50% markup equals a 33% margin (on $100 cost: $150 selling price → $50 profit is 33% of $150)

Industry Benchmarks (Typical Markups)

Pricing Strategy Tips

• ✅ Know your costs — include all expenses (materials, labor, overhead)
• ✅ Research competitors — price competitively but don't race to the bottom
• ✅ Consider value-based pricing — charge what customers are willing to pay
• ✅ Adjust for volume — lower markup for high-volume products
• ✅ Review regularly — update prices as costs and market conditions change

Advanced Pricing Considerations

For more sophisticated pricing strategies:

• Psychological pricing: $9.99 instead of $10
• Tiered pricing: Different prices for different versions/quantities
• Bundle pricing: Discounts for purchasing multiple items together
• Dynamic pricing: Adjust prices based on demand, time, or customer