Markup Calculator – Cost, Price, Margin and Profit
This Markup Calculator helps you move from cost to selling price in a structured way. Instead of guessing a selling price, you enter your cost and the markup or margin you want to achieve. The calculator returns price per unit, profit per unit, overall profit, and the relationship between markup and margin so your pricing stays consistent and profitable.
Markup and margin are often confused. Many businesses talk in markup terms (“we add 40% on top of cost”), while finance teams often think in margin (“we want a 30% margin on sales”). If you treat them as the same thing, your prices can drift away from your real profitability targets. This tool keeps both in sync so you can check your numbers quickly for products, services, packages and offers.
How the Markup Calculator Works
The calculator is split into three connected modes:
- Cost-Based Markup: Enter cost and markup percentage to find selling price, profit and margin.
- Target Margin Price: Enter cost and desired margin to calculate the price you need to charge.
- Margin–Markup Converter: Convert between margin and markup using the correct formulas and see example numbers.
This structure makes it easy to switch between operational pricing (markup) and financial targets (margin) without doing the math manually.
Mode 1: Cost-Based Markup
In many retail and service businesses, pricing starts from cost. You decide how much extra you want to add on top of cost, expressed as a markup percentage. This mode takes your cost and markup and returns the right selling price and profit margin.
Formula for Selling Price from Markup
Profit per unit is the difference between selling price and cost:
Profit margin expresses profit as a percentage of the selling price instead of cost:
When you enter a quantity, the calculator multiplies price and profit per unit by quantity to show total revenue and total profit for a batch or order.
Mode 2: Target Margin Price
Sometimes you start with a required margin target based on your business goals or industry benchmarks. In that case, you want to know what price you must charge to achieve that margin on a given cost. The Target Margin Price mode handles this direction.
Formula for Selling Price from Margin
If you want a specific margin, you solve for selling price as:
Profit per unit then becomes:
From that result, the equivalent markup percentage is:
This makes it easy to check whether your current pricing actually meets your margin target or if you need to adjust up or down.
Mode 3: Margin–Markup Converter
Because markup and margin are based on different denominators, the same selling price will produce different percentages depending on which you quote. The converter mode lets you start from either markup or margin and see the matching value for the other.
Formulas Linking Markup and Margin
Assuming cost is 100 for simplicity:
The calculator applies these formulas directly. It also shows an example with cost 100 so you can see selling price and profit in plain numbers.
Examples of Markup and Margin Calculations
Example 1: Cost-Based Markup
Suppose your cost per unit is 25 and you want a 40% markup. Selling price is 25 × 1.40 = 35. Profit per unit is 10. Margin is 10 ÷ 35 × 100 ≈ 28.57%. If you sell 100 units, your revenue is 3,500 and your total profit is 1,000.
Example 2: Target Margin Pricing
Now you want a 30% profit margin on an item that costs 25. Selling price is 25 ÷ (1 − 0.30) ≈ 35.71. Profit per unit is about 10.71. The equivalent markup is 10.71 ÷ 25 × 100 ≈ 42.86%.
Example 3: Converting Markup to Margin
If you apply a 50% markup on cost, and cost is 100, selling price is 150 and profit is 50. Margin is 50 ÷ 150 × 100 ≈ 33.33%. The converter mode gives you this margin directly from the markup percentage.
Example 4: Converting Margin to Markup
If you want a 25% margin, and cost is 100, price must be 100 ÷ (1 − 0.25) = 133.33. Profit is 33.33. Markup is 33.33 ÷ 100 × 100 ≈ 33.33%. The converter confirms this relationship.
Why Markup and Margin Matter for Pricing
Using markup or margin inconsistently can lead to underpricing or overpricing. For example, treating a “40% margin” as “40% markup” gives a lower selling price than intended and reduces profit. The Markup Calculator helps you avoid these misunderstandings by showing both views side by side.
With a clear view of markup and margin, you can:
- Keep pricing aligned with profit targets.
- Compare different products and services on the same basis.
- Test how changes in cost or margin affect selling price.
- Communicate clearly between finance teams and sales or merchandising teams.
- Build consistent pricing rules for catalogs, menus or service packages.
How to Use This Tool Effectively
- Start with the Cost-Based Markup tab if your pricing process begins with cost and a chosen markup percentage.
- Use the Target Margin Price tab when your business tracks margins closely and you need prices that hit a specific margin goal.
- Open the Margin–Markup Converter whenever you need to translate between internal margin targets and external markup rules.
- Experiment with different costs, markups and margins to see how sensitive profit and price are to each change.
- Apply the same logic to services by treating time, overhead and materials as your underlying “cost per unit.”
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Markup Calculator FAQs
Frequently Asked Questions About Markup and Margin
Get answers about cost-based pricing, markup percentage, profit margin and target selling prices.
Markup depends on your industry, competition, costs and profit targets. Use the calculator to test several scenarios and see how each markup changes your margin and price.
Markup measures profit relative to cost, while margin measures profit relative to selling price, which is higher. That difference makes margin appear lower than markup for the same numbers.
Yes. Estimate total cost for the entire bundle and enter it as cost per unit, then use the calculator to find a selling price that meets your markup or margin requirements.
The calculator works with net cost and price. You can include taxes, shipping or overhead in your cost base manually if you want them reflected in your margin and markup numbers.
Yes. You can use it to plan prices for ecommerce catalogs, in-store price tags and service menus, as long as you have a realistic cost estimate per item or hour.
No. It simply performs calculations from the numbers you enter in your browser. Always export or save your own notes if you need a record of pricing decisions.