What is markup?
Markup is the amount you add on top of cost to arrive at a selling price, written as a percentage of the cost. Margin describes the same profit as a percentage of the selling price, which is why the two figures are never equal: a 50% markup is a 33.33% margin.
Formulas
Selling price = cost × (1 + markup ÷ 100)Gross margin = profit ÷ selling price × 100
Worked example
An item costs 40.00 and you add a 50% markup. The selling price is 60.00, the profit is 20.00 per unit and the gross margin is 33.33%.
How to use the markup calculator
- Enter your figures: cost per unit and markup.
- Read the result. It updates as you type, so there is no button to press.
- Try other numbers to compare scenarios. Reset brings back the example values.
Getting it right
- Markup is measured against cost; margin is measured against price. Say which one you mean when you talk to suppliers or your accountant.
- To hit a target margin instead, use price = cost ÷ (1 − margin). A 40% margin needs a 66.67% markup.
- Count every cost of getting the item ready to sell — freight, packaging, payment fees — before you apply the markup.
Frequently asked questions
What is the difference between markup and margin?
Markup is profit divided by cost. Margin is profit divided by selling price. The profit is the same amount of money; only the base changes, so markup is always the larger percentage.
What is a good markup percentage?
It depends on the trade. Groceries often run on 10–25%, clothing and gifts are commonly doubled (100%), and services can go much higher. What matters is that the margin left after the markup covers your overheads.
Can markup be more than 100%?
Yes. A 100% markup doubles the cost and anything above it more than doubles it. Margin, by contrast, can never reach 100%.