Selling Price
$80.00
Cost
$50.00
Markup
60.0%
Margin
37.5%
Cost
$50.00
+60%
$30.00
Sell Price
$80.00
Markup %
60.0%
Profit Margin
37.5%
Markup = Profit ÷ Cost
$30.00 ÷ $50.00 = 60.0%
Margin = Profit ÷ Selling Price
$30.00 ÷ $80.00 = 37.5%
Markup = (Selling Price - Cost) ÷ Cost × 100. It's the % added to cost for profit. Example: $100 cost, $150 price = ($150-$100)/$100 × 100 = 50% markup. To find price: Cost × (1 + Markup%).
| Cost | Markup % | Profit | Selling Price |
|---|---|---|---|
| $100 | 25% | $25 | $125 |
| $100 | 50% | $50 | $150 |
| $100 | 100% | $100 | $200 |
| $100 | 150% | $150 | $250 |
Markup = Profit ÷ Cost. Margin = Profit ÷ Price. Same profit, different denominators! 50% markup ≠ 50% margin. 50% markup = 33.3% margin. 100% markup = 50% margin. Margin is always lower.
| Cost | Price | Profit | Markup % | Margin % |
|---|---|---|---|---|
| $100 | $125 | $25 | 25% | 20% |
| $100 | $150 | $50 | 50% | 33.3% |
| $100 | $200 | $100 | 100% | 50% |
| $100 | $300 | $200 | 200% | 66.7% |
Markup to Margin: Margin = Markup ÷ (100 + Markup). Margin to Markup: Markup = Margin ÷ (100 - Margin). Example: 50% markup = 50÷150 = 33.3% margin. 40% margin = 40÷60 = 66.7% markup.
| Markup % | Margin % | Conversion |
|---|---|---|
| 20% | 16.7% | 20÷120 = 0.167 |
| 33.3% | 25% | 33.3÷133.3 = 0.25 |
| 50% | 33.3% | 50÷150 = 0.333 |
| 100% | 50% | 100÷200 = 0.50 |
Industry averages: Grocery 10-30%, Apparel 50-100%, Electronics 20-50%, Jewelry 100-300%, Restaurants 200-400% (on food). Higher markups offset higher costs (returns, spoilage, expertise).
| Industry | Typical Markup | Typical Margin | Why |
|---|---|---|---|
| Grocery | 10-30% | 10-23% | High volume, low margin |
| Apparel | 50-100% | 33-50% | Returns, seasons, fashion |
| Electronics | 20-50% | 17-33% | Competition, obsolescence |
| Jewelry | 100-300% | 50-75% | Expertise, custom work |
| Restaurants (food) | 200-400% | 67-80% | Labor, rent, waste |
| Software/SaaS | 80-400% | 45-80% | R&D, support, updates |
Selling Price = Cost × (1 + Markup%). For 40% markup on $75 cost: $75 × 1.40 = $105. For target price, work backward: Cost = Price ÷ (1 + Markup%).
Keystone = 100% markup (double the cost). $50 cost → $100 price. Simple to calculate, common in retail. May be too low for low-volume items or too high for competitive markets. Many retailers use as starting point.
Inputs
Result
Markup Amount = $50 x (60/100) = $30. Selling Price = $50 + $30 = $80. Profit Margin = ($30 / $80) x 100 = 37.5%. A 60% markup results in only a 37.5% profit margin.
Inputs
Result
Markup Amount = $75 x (100/100) = $75. Selling Price = $75 + $75 = $150 (double the cost). Profit Margin = ($75 / $150) x 100 = 50%. Keystone pricing (100% markup) always yields a 50% profit margin.
Selling Price = Cost + (Cost x Markup% / 100)Calculates the selling price by adding the markup amount to the cost.
Where:
Cost= The cost to purchase or produce the itemMarkup%= The percentage to add on top of costMarkup% = ((Selling Price - Cost) / Cost) x 100Calculates the markup percentage when you know the cost and selling price.
Where:
Selling Price= The price the customer paysCost= The cost to purchase or produce the itemProfit Margin = ((Selling Price - Cost) / Selling Price) x 100The profit as a percentage of the selling price (margin is always lower than markup for the same profit).
Where:
Selling Price= The price the customer paysCost= The cost to purchase or produce the item50% markup produces only a 33.3% profit margin — not 50% — because the two metrics use different denominators. Markup divides profit by cost (what you paid), while margin divides profit by selling price (what the customer pays). A product costing $100 sold for $150 carries a 50% markup ($50/$100) but only a 33.3% margin ($50/$150).
Confusing the two leads directly to underpricing. A business owner targeting "50% margin" who accidentally applies 50% markup to a $100 item sets the price at $150 instead of the correct $200. That error cuts profit per unit from $100 to $50 — a 50% revenue loss on every sale.
The conversion formulas are straightforward: Markup to Margin = Markup ÷ (100 + Markup). Margin to Markup = Margin ÷ (100 – Margin). At 100% markup, the margin is exactly 50%. At 200% markup (triple keystone), the margin reaches 66.7%. Use the profit margin calculator for instant conversions.
| Markup % | Margin % | Cost $100 Price | Profit |
|---|---|---|---|
| 25% | 20% | $125 | $25 |
| 50% | 33.3% | $150 | $50 |
| 100% | 50% | $200 | $100 |
| 150% | 60% | $250 | $150 |
| 200% | 66.7% | $300 | $200 |
200–400% markup on restaurant food costs sounds extreme until you factor in labor (30–35% of revenue), rent (6–10%), waste (5–8%), and equipment overhead. A $4 plate of pasta priced at $16 carries a 300% markup, but after all costs, the restaurant’s net profit margin is typically only 3–9%.
Grocery stores operate on razor-thin 10–30% markups, relying on massive volume to generate profit. A $3.00 gallon of milk costs the store approximately $2.50 — just $0.50 in gross profit. Electronics retailers face 20–50% markups compressed by price-comparison shopping and rapid obsolescence.
Software and SaaS products command 80–400% markups because marginal cost per additional user is near zero after initial development. A $10/month SaaS tool might cost $2/user in hosting and support, yielding an 80% gross margin. Jewelry, custom work, and expertise-based services similarly support 100–300% markups because customers pay for craftsmanship, not raw materials.
| Industry | Typical Markup | Typical Margin | Key Cost Driver |
|---|---|---|---|
| Grocery | 10–30% | 10–23% | Volume, spoilage |
| Apparel | 50–100% | 33–50% | Returns, seasons |
| Electronics | 20–50% | 17–33% | Obsolescence |
| Restaurants | 200–400% | 67–80% | Labor, rent, waste |
| Jewelry | 100–300% | 50–75% | Craftsmanship, materials |
| Software/SaaS | 80–400% | 45–80% | R&D, support |
100% markup — doubling the cost — is called keystone pricing and remains the most common starting point in retail. A $50 wholesale item priced at $100 yields a 50% gross margin, which typically covers overhead, marketing, and still leaves room for 10–15% net profit in a well-run retail operation.
Triple keystone (200% markup, or Cost × 3) is standard for specialty and boutique items where customers expect to pay a premium. A $30 artisan candle priced at $90 generates $60 in gross profit per unit — enough to absorb the higher per-unit costs of small-batch production, premium packaging, and in-store labor.
Keystone may be too high for commodity products in competitive markets (groceries, basic electronics) and too low for unique or customized items. The right markup ultimately depends on your cost structure, competitive landscape, and customer price sensitivity. Use the discount calculator to model how markdowns affect margin during sales.
Tip: Always calculate your break-even point before setting markup. If fixed costs are $5,000/month and each unit nets $25 profit, you need 200 units/month just to break even.
$50 cost with a 60% markup produces a selling price of $80 and a profit margin of 37.5%. Switch to "Price from Markup" mode, enter the cost and desired markup percentage, and the calculator instantly shows selling price, markup amount, and equivalent profit margin side by side.
Use the reverse mode when you know the selling price and cost but need to find the markup percentage. Enter $50 cost and $80 selling price to confirm a 60% markup and 37.5% margin. Run multiple scenarios to find the sweet spot between competitive pricing and adequate profit.
Tip: Run scenarios at keystone (100%), your target markup, and a competitive "floor" markup to see the profit range before setting your final price.
Choose a calculation mode
Select "Price from Markup %" to calculate selling price, or enter cost and price directly to find the markup percentage.
Enter your cost
Use your all-in cost including materials, shipping, and packaging — not just wholesale price.
Set the markup or selling price
Enter your target markup percentage (e.g., 60%) or the price you plan to charge customers.
Review results
Compare selling price, markup %, profit margin %, and gross profit amount. Ensure margin covers your overhead and target net profit.
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Last Updated: Mar 26, 2026
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