How markup works
Markup is how much you add on top of your cost, as a percentage of that cost:
Selling price = cost × (1 + markup)
An item that cost $40.00 with a 60% markup sells for $40.00 × 1.6 = $64.00. Your profit is $24.00, which is a 37.5% margin on the selling price.
Markup on a $30 item
| Markup | Selling price | Profit | Margin |
|---|---|---|---|
| 25% | $37.50 | $7.50 | 20.0% |
| 50% | $45.00 | $15.00 | 33.3% |
| 75% | $52.50 | $22.50 | 42.9% |
| 100% | $60.00 | $30.00 | 50.0% |
| 150% | $75.00 | $45.00 | 60.0% |
| 200% | $90.00 | $60.00 | 66.7% |
Working out the markup from a price
If you already know both the cost and the price, the markup is the profit divided by the cost. Bought for $25.00 and sold for $40.00: $15.00 ÷ $25.00 = 60% markup.
Markup or margin?
Suppliers and wholesalers usually talk in markup, because it starts from the cost. Accountants and most reports use margin, because it starts from the sale. Mixing them up is the most common pricing mistake: a 30% markup is only a 23.1% margin. Use the box under the result to turn a margin you want into the markup that gets you there, or try the profit margin calculator.
When you sell online, the platform fee comes out of the selling price, not the cost. Check what is left with the eBay or Etsy fee calculator.
Markup questions
What is a 100% markup?
It means the selling price is double the cost. An item that cost $15.00 sells for $30.00. A 100% markup is a 50% margin.
How do I calculate markup percentage?
Subtract the cost from the selling price, divide by the cost and multiply by 100.
What markup do I need for a 25% margin?
A 33.3% markup. To turn any margin into markup, divide the margin by one minus the margin: 0.25 divided by 0.75 is 0.333.
Is markup the same as profit margin?
No. They describe the same profit, but markup compares it to the cost and margin compares it to the selling price. Markup is always the larger number.
What is keystone pricing?
A retail rule of thumb where the selling price is double the wholesale cost: a 100% markup, or a 50% margin.