Markup Calculator

Subtract cost from selling price, divide the result by cost, and multiply by 100. A product that costs you $50 and sells for $100 has a $50 profit and a 100% markup -- the classic keystone number in retail. The formula trips people up because they reach for revenue as the denominator, which would give them margin instead; markup uses cost as the denominator specifically because you are measuring how much you added on top of what the product cost you to acquire or make.

Both numbers describe the same dollar profit, just from different angles, and mixing them up is the single most expensive mistake in retail pricing. Markup divides profit by cost; margin divides the exact same profit by revenue. Sell something for $100 that cost you $40 and your markup is 150% while your margin is 60% -- the $60 profit is identical, the framing is not. Accountants quote margin because it tells them what fraction of every sales dollar ends up as profit. Merchants often think in markup because that is how you price forward from a wholesale invoice. Quote "50% profit" in a meeting without specifying which metric and you will end up with prices that are either too low or too high by a painful amount.

Divide markup by one plus the markup expressed as a decimal. A 50% markup becomes a 33.3% margin because 0.50 divided by 1.50 equals 0.333. Going the other way, divide margin by one minus margin -- so a 40% margin is a 66.7% markup. Here is the honest math that catches sellers off guard: the two numbers match at zero and diverge faster as profitability grows, so a 10% markup and 10% margin feel almost identical (9.1% vs 11.1%) while a 200% markup collapses to a 66.7% margin. Plug the wrong one into the wrong field -- accounting software wants margin, most e-commerce storefronts want markup -- and your pricing drifts out of plan without anyone noticing for months.

Keystone is the old retail tradition of doubling the wholesale cost -- exactly 100% markup, which produces a 50% gross margin. A $20 wholesale item sells for $40. The rule survived for decades because it is easy to do in your head at the counter and gives enough cushion to cover overhead, shrinkage, and eventual markdowns without requiring a spreadsheet. Modern retail rarely sticks to straight keystone anymore because competitive pressure from big-box chains and Amazon squeezes the simple doubling below what shoppers will tolerate. Apparel boutiques and independent jewelers still use keystone as a floor; grocery, consumer electronics, and commodity categories have been operating well below it for a long time.

Multiply the cost by one plus the markup as a decimal. If your cost is $30 and you want a 60% markup, the math is $30 times 1.60, which gives you $48. The "Calculate Price from Markup" mode handles this directly because it is the number merchants actually need when they load products into a storefront or write price tags. Entering markup first avoids the subtle mistake of trying to add "40% of cost" on top of cost and expecting a 40% margin -- you would land at a 40% markup and only a 28.6% margin, which is a quieter number than most sellers want.

Markup uses cost (the smaller number) as its denominator while margin uses revenue (the larger number), so the same dollar of profit always produces a fatter markup percentage than margin. A product with $20 cost that sells for $50 earned $30 of profit -- that is a 150% markup but only a 60% margin. The gap widens as profitability grows: a 100% markup is a 50% margin, a 200% markup is 66.7%, and a 300% markup is 75%. Neither number is wrong. They answer different questions, which is why every quote inside a single company should specify which one before anyone builds a pricing model on top of it.