Last updated: July 2026
Set Your Prices Faster
When you receive a new shipment of inventory, you need to set prices quickly. Using a standard Markup percentage across your entire catalog ensures consistent profitability and simplifies your pricing strategy.
Understand the Margin/Markup Relationship
Retailers often target a specific Profit Margin, but they have to use a Markup to actually set the price. Our tool links these two metrics together. Enter your cost and target selling price, and we will tell you exactly what the Markup is.
Worked Example
Using the calculator's default numbers — a $100 cost and $150 selling price:
- Profit = $150 − $100 = $50
- Markup = $50 ÷ $100 × 100 = 50%
- Margin = $50 ÷ $150 × 100 = 33.3%
Frequently Asked Questions
Markup is the percentage you add to the Cost of a product to determine its Selling Price. It is calculated as Profit divided by Cost.
To apply a 50% markup, simply multiply your cost by 1.5. If an item costs $20, a 50% markup adds $10, making the final price $30.
Because Markup is divided by the Cost (a smaller number), while Margin is divided by Revenue (a larger number). A 100% markup always equals a 50% margin.
Because pricing decisions usually need all three numbers together. You set prices using Markup, but you evaluate profitability using Margin — seeing both for the same cost and price prevents you from misreading one as the other.
It varies widely by industry. Clothing retailers often mark up 100-150%, grocery stores commonly mark up 10-30%, and furniture or jewelry can be marked up 200% or more, reflecting different overhead and turnover rates.
Use the formula: Markup % = Target Margin % ÷ (100% − Target Margin %). For example, to hit a 40% margin, you need a markup of 40 ÷ 60 = 66.7%.
No, markup is calculated on your pre-tax cost and selling price. Sales tax is added separately at checkout and isn't part of your profit calculation.