What this calculator does
Markup is the amount added to a cost price to produce a selling price. It is the most common way to price retail stock and simple services, because it starts from what you paid.
This calculator converts a cost price and a markup percentage into a recommended selling price, then shows the profit margin that price actually produces.
How the calculation works
The markup percentage is applied to the cost price. A cost of 150 with a 50% markup adds 75, producing a selling price of 225.
That 75 profit is 50% of cost but only 33.33% of the 225 price. The calculator shows both figures so you can price with the number you actually meant.
Worked example: Pricing stock with a 50% markup
- 1Cost price: 150.00
- 2Markup amount: 150.00 × 50% = 75.00
- 3Selling price: 150.00 + 75.00 = 225.00
- 4Equivalent margin: (75.00 ÷ 225.00) × 100 = 33.33%
The item sells for 225.00, a 50% markup that produces a 33.33% profit margin.
Common mistakes
- Confusing markup with margin and believing a 50% markup earns a 50% margin.
- Applying markup to a cost that excludes shipping and import duties.
- Using markup for services where the true cost includes your own time.
- Forgetting that discounts reduce margin faster than they reduce price.