Markup Calculator

The Markup Calculator helps you find the correct selling price and profit margin for your products. It’s a must-have tool for businesses, freelancers, and eCommerce owners who want to price their items effectively and ensure consistent profits.

Enter Your Details

Cost Price ($): Selling Price ($): Calculate Markup

Understanding Markup

Markup is the percentage increase from the cost price to the selling price. It helps determine how much profit you make on a product relative to its cost. While profit margin measures profit as a percentage of revenue, markup measures profit as a percentage of cost.

Markup Formula

Markup (%) = ((Selling Price – Cost Price) / Cost Price) × 100

Example Calculation

If the cost price is $50 and the selling price is $75, then:
Markup = ((75 – 50) / 50) × 100 = 50%.
This means the product is priced 50% above its cost.

Why Markup Matters

• Ensures your products are priced to cover costs and generate profit
• Helps track pricing consistency across your catalog
• Provides insights into how discounts affect profitability
• Assists in investment planning for inventory and expansion

Markup vs Profit Margin

While many people confuse markup with margin, they are not the same. For example, a 50% markup doesn’t mean a 50% profit margin. Learn the difference using this detailed guide on Investopedia: Margin vs Markup.

How to Use This Calculator Effectively

1. Enter your cost price and selling price.
2. Click the “Calculate” button.
3. Review your markup percentage and adjust your prices if needed.

Pricing Strategy Tips

• Include all variable and fixed costs in your product’s cost price.
• Test different markups to find the best price-to-demand ratio.
• Compare results with our Break-Even Calculator to see when profit begins.
• Recalculate regularly as costs and competition change.

Learn More About Markup and Business Pricing

For an in-depth understanding of how markup impacts profitability, read Corporate Finance Institute’s guide on Markup. You can also explore Wikipedia’s entry on Markup in Business for a historical perspective on pricing methods.

Conclusion

By using this Markup Calculator, you can confidently set your prices to ensure profit while staying competitive. It’s a simple but powerful way to improve your financial strategy and keep your business sustainable over the long term.