Free Markup Calculator
Use this free markup calculator to calculate your selling price, markup amount, profit per unit, and resulting gross margin. Enter your product cost and desired markup percentage to receive an instant pricing breakdown.
What the Markup Calculator Shows
The calculator shows your product cost, markup amount, recommended selling price, profit per unit, and resulting gross margin. These results can help you evaluate pricing before accounting for additional expenses such as shipping, payment processing, advertising, taxes, and returns.
How to Calculate Markup
Markup measures how much you increase a product’s cost when setting its selling price.
Markup Amount = Product Cost × Markup Percentage
Selling Price = Product Cost + Markup Amount
For example, if a product costs $50 and you apply a 40% markup:
Markup Amount: $20
Selling Price: $70
The calculator above performs these calculations automatically and also shows the resulting gross margin.
Additional Formula:
Markup Percentage = ((Selling Price − Product Cost) ÷ Product Cost) × 100
Markup vs. Profit Margin
Markup and profit margin both measure profitability, but they use different starting points.
Markup compares profit to the original product cost.
Profit margin compares profit to the final selling price.
For example, if a product costs $50 and sells for $100:
Markup: 100%
Gross Margin: 50%
This difference matters when setting prices. A 50% markup does not produce a 50% profit margin.
If you want to measure profitability based on your revenue and business expenses, use the Profit Margin Calculator
Markup Example
Suppose you purchase a product for $80 and want to apply a 25% markup.
Your markup amount would be:
$80 × 25% = $20
Your selling price would therefore be:
$80 + $20 = $100
Your profit per unit would be $20, while the resulting gross margin would be 20%.
Frequently Asked Questions
How is markup percentage calculated?
Subtract the item’s cost from its selling price. Divide that difference by the original cost, then multiply by 100 to find the markup percentage.
What does a 45% markup mean?
A 45% markup means the business adds $45 for every $100 of product cost. An item that costs $80 would have a selling price of $116 before taxes, discounts, or additional fees.
How do I calculate selling price from cost and markup?
Multiply the product cost by the markup percentage expressed as a decimal to calculate the markup amount. Add the markup amount to the original product cost to determine the selling price. For example, a $60 product with a 30% markup has an $18 markup amount and a $78 selling price.
Why is markup important when setting prices?
Markup helps businesses establish selling prices that cover product costs and contribute toward operating expenses and profit. Using an appropriate markup can prevent products from being priced too close to their acquisition or production cost.
What expenses should ecommerce businesses include when calculating markup?
Ecommerce businesses should consider wholesale costs, inbound shipping, packaging, payment-processing fees, marketplace fees, fulfillment expenses, advertising, and expected returns. Including these costs provides a more realistic basis for setting profitable product prices.
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