Markup Calculator

What a Markup Calculator Does

A Markup Calculator helps you price products and services by converting cost into selling price or by measuring how much profit is built into an existing price. Markup is one of the most common pricing concepts because it is simple: you start with a cost, add a markup, and arrive at a selling price. When you do this consistently, you can ensure that pricing covers direct costs and creates enough gross profit to pay overhead and generate net profit.

Markup is especially useful for retail, wholesale, trading businesses, manufacturing, ecommerce, construction, and service companies that can define cost per unit or cost per job. The calculator on this page lets you work in several directions: find markup percent, find price from cost, find cost from price, and generate a pricing table you can export to CSV.

Markup vs Margin: The Difference Most People Mix Up

Markup and margin are related but not the same. The difference is the denominator. Markup is calculated as a percentage of cost, while margin is calculated as a percentage of selling price. This is why a 40% markup does not equal a 40% margin.

If cost is 100 and price is 140, markup is 40% because profit is 40 on a cost base of 100. Margin is about 28.57% because profit is 40 on a selling price base of 140. The calculator shows both metrics so you can communicate pricing correctly depending on whether your business uses markup-based rules or margin-based targets.

How to Calculate Markup Percentage

The markup percentage tells you how much profit you add on top of cost. If you know the cost and the selling price, markup percent is:

Markup percent is useful for comparing items with different prices and costs. It also helps you evaluate whether your pricing is consistent. In many businesses, markup varies by category to reflect demand, competition, return risk, and overhead allocation.

How to Calculate Selling Price From Cost and Markup

If you know cost and you want to apply a markup policy (for example, 35% markup), you can compute price directly:

This mode is popular for catalog pricing and for quoting services where cost is known. The calculator also shows the implied margin, which is often what finance teams track when they evaluate profitability by product line.

How to Calculate Cost From Price and Markup

Sometimes you have a market price and need to know the maximum cost you can accept while keeping your target markup. In that case:

This helps with supplier negotiation and procurement decisions. If your cost is higher than the implied cost from your target markup, you either need to raise price, accept a lower markup, or reduce costs.

Discounts and Their Impact on Markup

Discounts reduce the selling price but usually do not reduce cost. That means your realized markup and margin fall when you apply a discount. This tool includes an optional discount field so you can see the discounted price and the discounted markup percent.

This is useful for planning promotions and for understanding how aggressive discounting affects profitability. If your discount pushes contribution margin too low, the promotion may increase revenue but reduce profit.

Including Sales Tax or VAT

Markup and margin typically refer to pricing before sales tax or VAT. Taxes are often collected on behalf of the government and do not belong to the business as profit. However, customers experience the final price including tax, so it can be helpful to see both.

The calculator includes an optional tax rate to show the final consumer price after tax. This helps with pricing display, invoices, and customer communication.

Why Pricing Tables Save Time

Pricing decisions are often repetitive. A pricing table lets you compare multiple markup or margin levels quickly. For example, you might want to see prices at 20%, 30%, 40%, and 50% markup for a base cost. Or you may want to convert a margin target into an implied price to ensure your margin policy is consistent.

The pricing table mode in this tool can build a range of percentages and export to CSV, which is ideal for pricing sheets, catalogs, and bulk updates. It also shows both markup and margin side by side because those numbers can differ significantly at higher percentages.

Choosing the Right Markup for Your Business

There is no universal “best markup.” The right markup depends on your fixed overhead, inventory risk, payment terms, competition, and the value customers perceive. Businesses with high overhead and high service requirements typically need higher gross margins and may use stronger markups. Businesses with commodity products and strong competition often use lower markups and rely on volume.

A practical approach is to test markups that produce enough gross profit to cover overhead and still hit your target net profit. If you already know your cost structure, compare markup outcomes with break-even analysis and net profit targets so pricing supports sustainable profitability.

Limitations and Assumptions

This calculator focuses on pricing math and does not model returns, shrinkage, payment processing exceptions, or tiered discounts. If your costs vary with quantity, time, or supplier terms, run multiple scenarios. The most important thing is consistency: define cost and price the same way across your analysis so markup and margin are meaningful.