Markup Calculator
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What Your Result Means
- Selling Price: The price you need to charge customers to achieve your desired markup. This is the cost plus the profit you've added.
- Profit: The gross profit in dollars on each unit or transaction — the markup percentage applied to your cost.
- Equivalent Margin: The same profit expressed as a percentage of the selling price rather than the cost. Financial statements and analysts typically report margin (not markup), so this conversion is useful for comparing to industry benchmarks.
- Common benchmarks: A "keystone" markup is 100% (doubling the cost), which equals a 50% margin. Commodity goods often use 10-30% markup, while specialty retail may use 100-300%.
How This Calculator Works
You enter the cost of goods and your desired markup percentage. The tool multiplies cost by the markup rate to get profit dollars, adds that to cost for the selling price, and then computes the equivalent gross margin (profit as a share of selling price). It handles a single item — multiply by quantity for batch totals.
Quick Questions
What is keystone pricing?
Keystone pricing means doubling the wholesale cost to set the retail price — a 100% markup, which equals a 50% gross margin. It's a traditional retail rule of thumb, especially in clothing, accessories, and specialty goods. Many retailers use it as a starting point and adjust based on competition and demand.
How is markup different from margin?
Markup is profit as a percentage of cost; margin is profit as a percentage of revenue (selling price). For the same transaction, markup is always a higher number than margin. For example, a $10 cost sold at $15 has a 50% markup but a 33.3% margin.
Does this include operating expenses?
No. This calculates gross markup and margin only, based on cost of goods sold. Rent, labor, marketing, shipping, and other overhead are not factored in. To ensure profitability, your markup needs to cover all expenses beyond COGS.
What markup should I use for my business?
It depends on your industry, competition, and cost structure. Grocery stores often mark up 25-50%, restaurants 200-300% on food, and software companies may have very high markups due to low marginal cost. Research your industry's typical margins and work backward to find the right markup.
Sources
- SBA — Manage Your Business Finances (pricing strategies and cost management for small businesses)
- Investopedia — Markup Definition (markup vs. margin formulas and examples)
Method & review
Estimate only. Results reflect your inputs and standard formulas. Double-check important decisions independently.