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    Markup Calculator

    Calculate markup percentage, profit margin, and selling price. Convert between markup and margin instantly.

    Free to use. Runs in your browser.

    Enter your cost price and either a markup or margin percentage to calculate the selling price. Markup is expressed over cost; margin is expressed over selling price, they are not the same.

    Markup & Margin Calculator

    How Markup Pricing Works

    Markup is the amount added to the cost of a product to determine its selling price. If a product costs £10 to make and you sell it for £15, your markup is £5, or 50% of the cost.

    The formula: Markup % = ((Selling Price - Cost) / Cost) x 100. It's the simplest pricing method: know your cost, apply your markup, and you have your price. This is why cost-plus pricing is the most common strategy for physical products.

    The key mistake people make is confusing markup with margin. A 50% markup does NOT mean 50% of the selling price is profit. With a 50% markup, you sell a £10 item for £15, but your margin is only 33.3% (£5 profit on £15 revenue). Use the calculator above to convert between the two instantly.

    Standard Markups by Industry

    Industry / ProductTypical MarkupEquivalent MarginOn £10 Cost
    Supermarket groceries5 to 25%5 to 20%Sells for £10.50 to £12.50
    Clothing retail100 to 300%50 to 75%Sells for £20 to £40
    Restaurant food200 to 400%67 to 80%Sells for £30 to £50
    Restaurant drinks300 to 500%75 to 83%Sells for £40 to £60
    Jewellery100 to 400%50 to 80%Sells for £20 to £50
    Electronics10 to 50%9 to 33%Sells for £11 to £15
    Software / digital500 to 5,000%83 to 98%Near-zero marginal cost

    What this means for you: High markups don't always mean high profits. A restaurant marks up food 300% but spends heavily on rent, labour, and waste, net profit is typically 3 to 9%. Electronics retailers mark up only 20% but sell enormous volumes. The markup reflects the cost structure, not the profitability.

    Pricing Strategy Beyond Simple Markup

    Cost-Plus Pricing

    Add a fixed markup to your cost. Simple and predictable. Works well for commodities, wholesale, and products where customers can easily compare prices. The risk: it ignores what customers are willing to pay.

    Value-Based Pricing

    Price based on the value to the customer, not your cost. A £2 painkiller at an airport sells for £6 because travellers value convenience. Software companies use this, the cost to serve one more user is near zero, but the value is high.

    Competitive Pricing

    Set prices based on what competitors charge. Common in saturated markets like electronics retail. The downside: you're in a race to the bottom. Differentiate on service, quality, or experience to avoid pure price competition.

    Keystone Pricing

    A specific form of cost-plus: double the wholesale cost. Markup = 100%, margin = 50%. Simple and widely used in retail. "Keystone" because 50% margin is the foundation of traditional retail profitability.

    Quick Markup-to-Margin Cheat Sheet

    25% markup= 20% margin
    33% markup= 25% margin
    50% markup= 33% margin
    75% markup= 43% margin
    100% markup= 50% margin
    150% markup= 60% margin
    200% markup= 67% margin
    300% markup= 75% margin

    The most common mistake: confusing markup with margin. A 50% markup means you add half the cost on top (cost £10 → sell £15). A 50% margin means half the selling price is profit (sell £20 → profit £10). The margin is always a smaller number than the markup for the same absolute profit.

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    How to use this tool

    1

    Choose a calculation mode

    2

    Enter two values

    3

    See markup, margin, and profit instantly

    Common uses

    • Converting between markup and margin for product pricing
    • Calculating selling price from cost with a target markup
    • Working out your actual margin from known cost and price
    • Comparing profitability across different product lines
    • Setting wholesale and retail pricing strategies

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    Frequently Asked Questions

    What is the difference between markup and margin?
    Markup is profit as a percentage of cost. Margin is profit as a percentage of selling price. If a £10 item sells for £15: markup is 50% (£5 profit / £10 cost) and margin is 33.3% (£5 profit / £15 revenue). They measure the same profit from different angles.
    How is markup calculated?
    Markup % = ((Selling Price - Cost) / Cost) x 100. If an item costs £8 and sells for £12: (12 - 8) / 8 x 100 = 50% markup. The calculator above handles all four calculation directions automatically.
    What is keystone pricing?
    Keystone pricing means doubling the wholesale cost to set the retail price, a 100% markup, which equals a 50% margin. It's the traditional standard in retail. 'Keystone' because 50% margin is the foundation of most retail profitability.
    How do I convert markup to margin?
    Margin% = Markup% / (1 + Markup%). A 50% markup: 50 / (1 + 0.50) = 50 / 1.50 = 33.3% margin. A 100% markup: 100 / (1 + 1.00) = 50% margin. The relationship is non-linear, higher markups produce diminishing margin increases.
    How do I convert margin to markup?
    Markup% = Margin% / (1 - Margin%). A 25% margin: 25 / (1 - 0.25) = 25 / 0.75 = 33.3% markup. A 50% margin: 50 / (1 - 0.50) = 100% markup. As margin approaches 100%, markup approaches infinity.
    Which should I use for pricing, markup or margin?
    Use markup when you're adding a fixed percentage to cost (cost-plus pricing for wholesale, construction, manufacturing). Use margin when comparing profitability or communicating with accountants and investors. Most businesses use both in different contexts.
    What's a typical retail markup?
    Supermarkets: 5-25%. Clothing: 100-300%. Restaurants: 200-400% on food, 300-500% on drinks. Electronics: 10-50%. Jewellery: 100-400%. High markups don't always mean high profits, they often reflect high overhead costs.
    Why do restaurants have such high markups?
    A restaurant marking up food 300% sounds extreme, but after rent, labour, utilities, waste, insurance, and equipment, net profit is typically just 3-9%. The food cost is only 25-35% of the total cost of serving a meal. The markup covers everything else.
    Can markup be more than 100%?
    Yes, and it commonly is. A 100% markup means you doubled the cost. A 200% markup means the selling price is 3x the cost. Software and digital products can have markups of 5,000%+ because the marginal cost per user is nearly zero.
    How do I work out the cost from a selling price and margin?
    Cost = Selling Price x (1 - Margin%). If an item sells for £50 with a 40% margin: £50 x (1 - 0.40) = £50 x 0.60 = £30 cost. Use the 'Price + Margin' mode in the calculator above.
    What is cost-plus pricing?
    Cost-plus pricing adds a fixed markup percentage to your total cost. If your cost is £100 and you use a 30% markup, your selling price is £130. It's simple and guarantees a profit on every sale, but it ignores what customers are willing to pay.
    How does VAT affect markup calculations?
    Calculate markup on the net (ex-VAT) price, not the gross. If your cost is £10 and you markup 50% to £15, then add 20% VAT: £15 x 1.20 = £18 shelf price. The VAT isn't your profit, it goes to HMRC. Our VAT Calculator handles this.

    Results are for general informational purposes only and should be checked before use. They are not professional advice. See our Disclaimer and Terms of Service.