What is markup percentage and how is it calculated?

Markup percentage is the profit added to the cost of a product, expressed as a percentage of the cost. The formula is: Markup% = (Selling Price - Cost) / Cost x 100. Alternatively, if you know the markup percentage and the cost, the selling price is: Selling Price = Cost x (1 + Markup% / 100). For example, a product costing $50 with a 40% markup sells for $50 x 1.40 = $70, with $20 gross profit. Common markup percentages by industry: • Grocery / supermarket: 20–50% • Retail apparel: 100–300% • Electronics: 10–30% • Restaurants (food cost): 200–400% • Jewellery: 100–300% • Software / SaaS: 200–500% (very high gross margins) • Manufacturing: 20–50% • Books: 25–50%

What is the difference between markup and margin?

Markup and margin both describe profitability but use different denominators. Markup divides profit by cost. Margin (also called gross margin) divides profit by the selling price. They always give different percentages for the same transaction — markup is always the higher number. This causes widespread confusion in business pricing: if you set a price using a target margin but apply that percentage as a markup, you will systematically underprice every product. Key relationships: • Markup 40% on $50 cost: price = $70, margin = $20/$70 = 28.57% • Markup 100% on $50 cost: price = $100, margin = $50/$100 = 50% (keystone pricing) • Conversion formulas: Margin = Markup / (100 + Markup) x 100 • Conversion formulas: Markup = Margin / (100 - Margin) x 100 • Rule of thumb: margin is always less than markup for the same item • A 50% margin requires a 100% markup — NOT a 50% markup

How do I find the markup if I only know the cost and selling price?

Use the Cost + Price mode in this calculator, or apply the formula: Markup% = (Price - Cost) / Cost x 100. Divide the gross profit (price minus cost) by the cost, then multiply by 100. For example, if a product costs $70 and sells for $98: gross profit = $28, markup = $28 / $70 x 100 = 40%. This is one of the most common calculations in retail — working backwards from a given price to understand what markup was applied. Common scenarios where you need to find markup from prices: • Auditing a supplier's pricing to understand their margins • Comparing distributor prices against your own costs • Reverse-engineering competitor pricing on similar products • Verifying that invoiced prices match agreed markup agreements • Evaluating acquisitions: what markup does this business apply to cost of goods

What is keystone markup and is it still used?

Keystone markup is a traditional retail pricing rule that sets the selling price at exactly double the wholesale cost — a 100% markup, resulting in a 50% gross margin. For example, a retailer buying an item at $25 would price it at $50. Keystone pricing was the dominant rule of thumb in brick-and-mortar retail for decades because it was simple and reliably covered overheads and profit in typical retail environments. Keystone pricing today: • Still widely used in jewellery, fashion, and specialty retail • E-commerce and price comparison tools have put pressure on keystone margins • High-volume, low-cost categories (electronics, appliances) operate well below keystone • Luxury and artisan goods routinely exceed keystone (200–500% markup) • 'Below keystone' means markup below 100% (margin below 50%) — a signal of thin margins • Alternative rules: 2.5x keystone (150% markup, 60% margin) in some specialty retail • Fast-moving consumer goods (FMCG) often operate at 10–30% markup due to volume

How do I calculate the markup needed to achieve a target gross margin?

Use the conversion formula: Markup% = Margin% / (100 - Margin%) x 100. This is the most practically important markup formula for business owners. If you want a 40% gross margin, you need a 66.67% markup — NOT a 40% markup. Setting a 40% markup gives only a 28.57% margin, which is nearly 12 percentage points below your target. Markup required for common margin targets: • 10% margin target: requires 11.11% markup • 20% margin target: requires 25.00% markup • 25% margin target: requires 33.33% markup • 30% margin target: requires 42.86% markup • 40% margin target: requires 66.67% markup • 50% margin target: requires 100.00% markup (keystone) • 60% margin target: requires 150.00% markup • 70% margin target: requires 233.33% markup • Always verify using this calculator: enter cost + markup, then check the margin shown

Percentage Markup Calculator — Selling Price, Profit & Margin

Markup is the percentage added to the cost of a product to arrive at the selling price. This Percentage Markup Calculator works in three modes: enter cost and markup % to find the selling price; enter cost and selling price to find the markup %; or enter selling price and markup % to find the cost. ...

MARKUP CALCULATOR

I KNOW…

Cost

Markup %

SELLING PRICE

$70.00

GROSS PROFIT

$20.00

COST

$50.00

MARKUP

40%

MARGIN

28.5714%

QUICK EXAMPLES

LIVE DIAGRAM

SELLING PRICE

$70.00

MARKUP

40%

MARGIN

28.5714%

PROFIT

$20.00

SELLING PRICE COMPOSITION

COST $50.00

PROFIT $20.00

Cost: $50.00 (71.4%)

Profit: $20.00 (28.6%)

MARKUP vs MARGIN — ALWAYS DIFFERENT

Markup (on cost)40%

Margin (on price)28.5714%

Markup 40% on cost · Margin 28.5714% on price · Markup is always higher.

COST

$50.00

SELLING PRICE

$70.00

GROSS PROFIT

$20.00

MULTIPLIER

140% of cost

Live diagram · updates as you type

Created with❤️byeaglecalculator.com

MARKUP ↔ MARGIN CONVERSION TABLE

COST: $50.00 · YOUR MARKUP: 40% · YOUR MARGIN: 28.5714%

MARKUP %	MARGIN %	PRICE (cost $50.00)	GROSS PROFIT
10%	9.0909%	$55.00	$5.00
20%	16.6667%	$60.00	$10.00
25%	20%	$62.50	$12.50
30%	23.0769%	$65.00	$15.00
40% ←	28.5714%	$70.00	$20.00
50%	33.3333%	$75.00	$25.00
60%	37.5%	$80.00	$30.00
75%	42.8571%	$87.50	$37.50
100%	50%	$100.00	$50.00
150%	60%	$125.00	$75.00
200%	66.6667%	$150.00	$100.00

Markup % = profit ÷ cost. Margin % = profit ÷ price. Markup is always higher than margin for the same product.

HOW TO USE

1
Select your mode: Cost + Markup% (most common), Cost + Price (to find what markup was applied), or Price + Markup% (to find the cost from a given price and markup).
2
Enter your two known values. Cost is what you pay to buy or produce the item. Markup% is the percentage added on top of cost. Selling price is what the customer pays.
3
The result box shows selling price, gross profit, and — crucially — the gross margin, which is always lower than the markup for the same product.
4
Review the markup to margin conversion table to see the exact margin corresponding to every common markup from 10% to 200%, all calculated at your specific cost.
5
Use the quick example buttons to load common scenarios and see the calculator in action.

WORKED EXAMPLE

Example 1 (Cost + Markup): Cost $50, markup 40%. Price = $50 x 1.40 = $70. Gross profit = $20. Margin = $20/$70 = 28.57%. Example 2 (Cost + Price): Cost $70, price $98. Markup = ($98-$70)/$70 x 100 = 40%. Margin = $28/$98 = 28.57%. Example 3: To achieve 40% margin, required markup = 40/(100-40) x 100 = 66.67%. Price = $50 x 1.6667 = $83.33.

REFERENCE FORMULAS

FORMULA REFERENCE TABLE

NAME	FORMULA	DESCRIPTION
Selling Price	Price = Cost x (1 + Markup% / 100)	Add markup percentage to cost to get selling price
Markup %	Markup% = (Price - Cost) / Cost x 100	Profit as a percentage of cost — always higher than margin
Gross Margin %	Margin% = (Price - Cost) / Price x 100	Profit as a percentage of selling price — always lower than markup
Markup to Margin	Margin% = Markup% / (100 + Markup%) x 100	Convert markup to the equivalent gross margin
Margin to Markup	Markup% = Margin% / (100 - Margin%) x 100	Convert target margin to the required markup

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Last updated: April 25, 2026 · Formula verified by EagleCalculator team · Eagle-eyed accuracy for every calculation.