StoreBox's Markup Calculator
Price by markup %, gross margin %, or a target sale price. Enter your cost — get the selling price, profit, margin and markup instantly.
Cost $100.00
What is markup?
Markup is the amount you add to an item's cost to arrive at its selling price, written as a percentage of that cost. If a product costs you $100 and you sell it for $150, you've added $50 of profit — a 50% markup, because $50 is half of the $100 cost. Markup is the lens most people use when they price something "up from" what they paid for it: cost first, then add a percentage on top.
It helps to keep three numbers straight. Cost is what you pay to buy or make one unit. Price (revenue) is what the customer pays you. Profit is the gap between them. Markup expresses that gap relative to cost; gross margin — covered next — expresses the exact same gap relative to price. Same dollars of profit, two different denominators, and that single difference trips up a huge number of business owners.
Markup vs margin — the difference everyone gets wrong
This is the most expensive misunderstanding in pricing, so it's worth slowing down. Markup is profit as a percentage of cost. Gross margin is profit as a percentage of the sale price. The profit in dollars is identical; only the base changes.
Take that $100 item sold for $150. The $50 profit is 50% of the $100 cost (a 50% markup) but only 33.3% of the $150 price (a 33.3% margin). Because the price is always bigger than the cost, the margin percentage is always smaller than the markup percentage. They are never equal except at zero.
Why it matters: if you want to earn a 40% margin and you mistakenly mark up by 40%, you'll fall short — a 40% markup only yields a 28.6% margin. Here's how common markups translate:
| Markup % | Equivalent margin % | On a $100 cost |
|---|---|---|
| 15% | 13.0% | Sells for $115 |
| 25% | 20.0% | Sells for $125 |
| 33.3% | 25.0% | Sells for $133.33 |
| 50% | 33.3% | Sells for $150 |
| 75% | 42.9% | Sells for $175 |
| 100% | 50.0% | Sells for $200 |
| 150% | 60.0% | Sells for $250 |
| 233% | 70.0% | Sells for $333 |
Switch the calculator above to "By margin %" if you think in margin (most retailers and accountants do) and to "By markup %" if you think in markup (common for trades, makers and resellers). It converts between them for you on every keystroke.
The markup and margin formulas
To work forward from a target instead of backward from a price, rearrange them:
- Price from markup:
Price = Cost × (1 + markup ÷ 100) - Price from margin:
Price = Cost ÷ (1 − margin ÷ 100)— note the margin must stay below 100%, or the denominator hits zero and the price runs to infinity. - Profit:
Profit = Price − Cost - Convert markup → margin:
margin = markup ÷ (1 + markup)(as decimals). - Convert margin → markup:
markup = margin ÷ (1 − margin)(as decimals).
How to choose a markup for your business
There's no universal "right" markup — the number has to cover your overhead, match what customers will pay, and beat your competition without starting a race to the bottom. Higher-volume, lower-touch businesses run thin; specialty and service businesses run fat. Typical ranges by industry:
| Business type | Typical markup | ≈ Gross margin |
|---|---|---|
| Grocery / supermarket | 5–25% | 5–20% |
| General retail | 50–100% | 33–50% |
| Apparel & accessories | 100–300% | 50–75% |
| Restaurants (food) | 200–300% | 67–75% |
| Contractors / construction | 10–30% on materials | 9–23% |
| Professional & freelance services | 100%+ (effective) | 50%+ |
| Jewelry / luxury goods | 100–1,000%+ | 50–90%+ |
Use these as sanity checks, not gospel. Start from the margin you need to stay profitable after all costs, set your price there, then compare it to the market. If your required price is far above competitors, your costs — not your markup — are usually the real problem.
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Worked examples
Price up from cost and markup
You buy a product for $100 and want a 50% markup. Price = 100 × (1 + 0.50) = $150. Profit is $50, and that $50 is 50 ÷ 150 = 33.3% gross margin. Sell 40 of them and you've made $2,000 profit on $6,000 of revenue.
Hit a target margin
The same $100 item, but you need a 40% margin to cover overhead. Price = 100 ÷ (1 − 0.40) = 100 ÷ 0.60 = $166.67. That works out to a 66.7% markup — proof that a 40% margin needs far more than a 40% markup.
Back out the numbers from a price
A supplier already lists the item: it costs you $80 and you plan to sell it for $100. Markup = (100 − 80) ÷ 80 = 25%. Margin = (100 − 80) ÷ 100 = 20%. Use "By sale price" mode above to do this instantly for any cost-and-price pair.
Common pricing mistakes
- Treating markup and margin as the same. The single biggest error. A "50% markup" and a "50% margin" produce very different prices — $150 versus $200 on a $100 cost.
- Pricing only on product cost. Gross markup ignores rent, labor, shipping, returns and payment fees. A 30% markup can still lose money once overhead is in.
- Discounting without doing the math. A 20% off coupon on a 33% margin item leaves you almost nothing — discounts come straight out of profit, not revenue.
- Copying a competitor's price. Their costs and volume aren't yours. Match the value, not the sticker.
- Never revisiting prices. Costs creep up; prices often don't. Re-run your markup whenever supplier costs change.
Frequently asked questions
Markup is the amount added to an item's cost to set its selling price, shown as a percentage of the cost. If something costs $100 and sells for $150, the markup is $50, or 50% of cost.
Markup is profit as a percentage of cost; gross margin is the same profit as a percentage of the selling price. Since price is always larger than cost, the margin percentage is always smaller. A 50% markup equals a 33.3% margin.
Subtract cost from the selling price to get profit, divide that by the cost, then multiply by 100. Example: ($150 − $100) ÷ $100 × 100 = 50% markup.
It varies by industry. Groceries run 5–25%, general retail 50–100%, restaurants 200–300%, and many services 100% or more. A good markup covers all your overhead and still leaves a healthy profit after discounts and returns.
Use margin = markup ÷ (1 + markup), with both as decimals. A 50% markup is 0.5 ÷ 1.5 = 0.333, a 33.3% margin. To reverse it, markup = margin ÷ (1 − margin).
No. A 50% markup gives a 33.3% margin, not 50%. To actually earn a 50% margin you need a 100% markup. Confusing the two is one of the most common and costly pricing mistakes.
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Disclaimer: This tool is provided by StoreBox for informational purposes only. StoreBox makes no warranties regarding the accuracy of results and is not liable for any losses, damages, or costs arising from reliance on this calculator. Always verify pricing against your full cost structure before making purchasing or pricing decisions.