Markup Calculator — Convert Markup to Margin & Find Selling Price
Enter your cost and desired markup to calculate the selling price, or enter the selling price to see your markup percentage.
Your Pricing
Sales Volume Projections
| Units Sold | Revenue | Total Cost | Gross Profit |
|---|
Understanding Markup vs Margin
Markup and margin are NOT the same! A 50% markup does NOT give you 50% margin. This is a costly mistake many business owners make.
What is Markup?
Markup is the percentage added to your cost to get the selling price. It's based on cost.
Markup % = (Price - Cost) / Cost × 100 Markup vs Margin Comparison
| Markup | Margin |
|---|---|
| 15% | 13.0% |
| 20% | 16.7% |
| 25% | 20.0% |
| 33% | 25.0% |
| 50% | 33.3% |
| 75% | 42.9% |
| 100% | 50.0% |
Typical Markups by Industry
- • Grocery: 5-15% markup
- • Clothing: 50-100% markup (keystone pricing)
- • Jewelry: 100-300% markup
- • Restaurants: 200-400% on food, 400-600% on drinks
- • Electronics: 10-30% markup
- • Furniture: 80-150% markup
Conversion Formulas
Margin = Markup / (1 + Markup) Markup = Margin / (1 - Margin) Pricing Strategy Tips
- • Don't compete on price alone—differentiate on value
- • Test prices—small increases often don't affect demand
- • Account for ALL costs: shipping, returns, payment fees
- • Use psychological pricing ($9.99 vs $10.00)
When to Use This Calculator
Pricing New Products
Enter your cost and desired markup percentage to instantly calculate the right selling price. Never underprice a product again because you did the math in your head.
Reverse-Engineering Competitors
If you know a competitor's selling price, enter it along with your cost estimate to see their likely markup. Use this to position your pricing intelligently.
Standardizing Pricing Rules
Many retailers use "keystone pricing" (100% markup = 2x cost). Use this calculator to find your target markup and apply it consistently across your product catalog.
Industry Benchmarks
| Industry | Typical Markup | Equivalent Margin |
|---|---|---|
| Grocery / Supermarket | 5–15% | 4.8–13% |
| Electronics | 10–30% | 9–23% |
| Apparel / Clothing | 50–100% | 33–50% |
| Home Furnishings | 80–150% | 44–60% |
| Jewelry | 100–300% | 50–75% |
| Restaurant Food & Drink | 200–500% | 67–83% |
Common Mistakes
Treating markup and margin as the same
A 50% markup gives you a 33.3% gross margin — not 50%. Mixing these up costs real money at scale.
Not including all costs in your base
Your "cost" must include shipping inbound, payment fees, storage, and shrinkage — not just purchase price. Undercosting your base leads to underpricing your product.
Using a single markup for all products
High-velocity, low-margin items can use a lower markup. Slow-moving, high-effort items need a higher markup to compensate for carrying costs and time.
Never testing price elasticity
Many small businesses chronically underprice. A 10% price increase often reduces volume by far less than 10%, resulting in higher overall profit.
Data Sources
Industry gross margin benchmarks for retail sectors derived from Census Annual Retail Trade Survey data.
Wholesale cost benchmarks by product category referenced from BLS PPI tables.
Small business average gross margin data by industry code from IRS SOI annual reports.
Frequently Asked Questions
What is the difference between markup and margin?
Markup is calculated on cost: (Price - Cost) / Cost x 100. Margin is calculated on revenue: (Price - Cost) / Price x 100. A 50% markup equals a 33.3% gross margin. They are not interchangeable — mixing them up is one of the most common pricing mistakes in small business.
How do I convert markup to margin?
Use the formula: Margin = Markup / (1 + Markup). For example, a 50% markup = 0.5 / 1.5 = 33.3% margin. To convert margin to markup: Markup = Margin / (1 - Margin).
What markup percentage should I use?
It depends on your industry. Grocery runs 5-15%, apparel 50-100%, jewelry 100-300%, and restaurants 200-500% on food. The right markup ensures your gross margin covers all overhead and leaves profit. Compare your markup against industry peers on PlainBizBench.
What is keystone pricing?
Keystone pricing is a retail rule of thumb where items are marked up 100% (doubled from cost). It simplifies pricing and is standard in apparel and home goods. However, it does not work for all categories — high-cost items may need lower markup, while low-cost high-effort items need higher markup.
How do I set a selling price from cost?
Selling Price = Cost x (1 + Markup%). For example, if your cost is $50 and you want a 60% markup: $50 x 1.60 = $80 selling price. Use the calculator above to try different markup scenarios instantly.
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