Markup Calculator
Simplify your pricing strategy. This tool helps you find the right balance between cost and price to hit your target profit goals.
What is markup?
Markup is the difference between the cost of a product and its selling price. It is usually expressed as a percentage of the cost price and is used to cover overhead and provide profit.
How is markup different from profit margin?
Markup is calculated as a percentage of the COST (Profit / Cost), whereas margin is calculated as a percentage of the SELLING PRICE (Profit / Revenue). For example, if cost is $80 and price is $100, the markup is 25% but the margin is 20%.
What is the formula for selling price using markup?
Price = Cost × (1 + Markup%). For example, if your cost is $50 and you want a 40% markup, your price is $50 × 1.4 = $70.
Why is it important to calculate markup correctly?
Proper markup ensures that your business covers all its expenses (fixed and variable) and remains profitable. Under-marking products can lead to cash flow issues even with high sales volume.