Pricing from what it costs you
Markup is the simplest way to set a price: start with what something costs you and add a percentage on top. Shops, makers and trades have priced this way for centuries, and it still works well when you know your costs and want a consistent rule.
Enter a cost and a markup and this calculator gives you the selling price and the profit on each sale. Or enter the cost and an existing price to see what markup you are already charging. Both modes also show the margin, because the two are easy to confuse and the difference matters.
Using the markup calculator
- Choose Price from a markup to set a price, or Markup from a price to check one.
- Enter the cost of one item or one job: materials, stock, delivery and any paid help.
- Enter your markup percent, or the selling price.
- Read the price or the markup, the profit in money, and the margin it works out to.
The markup formula
price = cost × (1 + markup ÷ 100)
markup = (price − cost) ÷ cost × 100
margin = markup ÷ (100 + markup) × 100Markup is always measured against the cost. A 100% markup doubles the cost; a 50% markup adds half of it again. The last line turns any markup into the margin it gives, so you can talk to an accountant or a buyer who thinks in margins.
Worked example: a 60% markup on 40
A maker buys materials for a candle set at $40 and adds a 60% markup.
- Markup amount: 60% of $40 = $24.00
- Selling price: $40 + $24 = $64.00
- Margin: $24 ÷ $64 × 100 = 37.5%
The set sells for $64.00, with $24.00 profit. That 60% markup is a 37.5% margin, because the profit is compared with the higher selling price rather than the cost.
Markup and margin side by side
| Markup | Price for a cost of 100 | Margin |
|---|---|---|
| 20% | 120 | 16.7% |
| 25% | 125 | 20% |
| 50% | 150 | 33.3% |
| 60% | 160 | 37.5% |
| 100% | 200 | 50% |
| 200% | 300 | 66.7% |
If someone asks for "a 50% margin", they mean a 100% markup. Mixing them up is one of the most common pricing errors, and it always works against the seller. The profit margin calculator starts from the margin side.
Pricing pitfalls
- Marking up an incomplete cost. If delivery, packaging or card fees are not in the cost, your markup is smaller than you think.
- One markup for everything. Fast-moving items can carry a smaller markup than slow ones that tie up space and money.
- Forgetting your own time on a service. For a job you do yourself, an hourly rate is part of the cost.
- Discounting without checking. A 20% discount on a 50% markup leaves a markup of only 20%. Run the sale price through Markup from a price before you commit.
Frequently asked questions
How do I calculate markup?
Take the cost from the selling price, divide by the cost and multiply by 100. An item that costs 30 and sells for 45 has a markup of 15 ÷ 30 × 100 = 50%. Choose Markup from a price above and enter both numbers; the calculator also shows the profit and the margin.
How do I add a markup to a price?
Multiply the cost by 1 plus the markup as a decimal. For a 35% markup on 80, multiply by 1.35 to get 108. The extra 28 is your profit on each sale. Enter the cost and markup above and the calculator shows the price, the profit and the margin that markup produces.
What is the difference between markup and margin?
Both use the same profit, but markup divides it by the cost and margin divides it by the selling price. Buying at 40 and selling at 64 is a 60% markup and a 37.5% margin. Markup is handy for setting prices; margin tells you what share of each sale you keep.
What is a typical markup?
It varies a lot by trade. Groceries often run on small markups, while clothing, jewellery and handmade goods are commonly marked up 100% or more because they sell more slowly and carry more risk. Start from your costs and what similar sellers charge, then check the margin covers your running costs.
What is cost-plus pricing?
Cost-plus pricing is setting a price by adding a fixed markup to your cost. It is quick and consistent, and it guarantees a profit on each sale if the costs are right. Its weakness is that it ignores what customers would pay, so check the result against prices in your market.
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