Free tool
Markup calculator: markup percentage, selling price and margin
Convertica's free markup calculator works out markup from any two of cost, selling price, profit and markup percentage, and shows the matching margin. Below it: a selling price calculator with sales tax or VAT as its own line, a markup to margin converter, and the conversion rate a higher markup has to hold to pay off. Any currency, no sign-up.
Short answer
A markup calculator works out how much is added to a product's cost to reach its selling price. Markup is profit divided by cost, shown as a percentage: (selling price - cost) / cost × 100. Enter any two of cost, selling price, profit and markup percentage, and Convertica's free calculator returns the rest, plus the matching margin.
- Markup is profit as a percentage of cost; margin is the same profit as a percentage of the selling price.
- Markup is always the larger number when there is a profit, so a markup and a margin with the same percentage are not the same price.
- Selling price is cost × (1 + markup). Sales tax or VAT is added on top and is not part of the markup.
- A markup on direct cost still has to pay for overheads and for winning the sale before any of it is profit.
- A higher markup earns more per order but can lower the conversion rate, so test a price change before you keep it.
Markup calculator
Fill in any two fields and leave the other two empty. Free, no sign-up, any currency. The result updates as you type.
Markup
60.00%
Profit: 80 selling price - 50 cost = 30.00.
Markup: 30.00 ÷ 50 cost = 60.00%.
Margin: 30.00 ÷ 80.00 selling price = 37.50%. Margin divides the same profit by the price; markup divides it by the cost.
As a multiplier: selling price = cost × 1.6.
Formula
markup % = (selling price - cost) / cost * 100
margin % = (selling price - cost) / selling price * 100Selling price calculator
A selling price from your cost and markup. Add your own sales tax or VAT rate to see the tax as a separate line.
Selling price
80.00
50 cost × (1 + 60%) = 80.00.
Profit per sale: 80.00 - 50 = 30.00. Margin: 30.00 ÷ 80.00 = 37.50%.
Formula
selling price = cost * (1 + markup)
price including tax = selling price * (1 + tax rate)Markup to margin converter
Turn a markup into the margin it gives, or a margin into the markup it needs.
Margin
37.50%
60% markup ÷ 160% = 37.50% margin. The 160% is the cost, 100%, plus the markup.
On a cost of 100: selling price 160.00, profit 60.00. That profit is 60.00% of the cost and 37.50% of the price.
Markup is always the larger of the two when there is a profit, because cost is smaller than the price.
Formula
margin = markup / (1 + markup)
markup = margin / (1 - margin)What is the markup formula?
The markup formula is profit divided by cost, shown as a percentage: markup % = (selling price - cost) / cost × 100. Markup tells you how much you add on top of what a product costs you. A product that costs 50 and sells for 80 makes 30.00 of profit, so its markup is 30.00 / 50 = 60.00%.
markup % = (selling price - cost) / cost * 100
selling price = cost * (1 + markup)
cost = selling price / (1 + markup)
profit = selling price - costIn the second and third lines the markup is a decimal, so 60% is 0.6. Cost means what one unit costs you to buy or make, often called cost of goods sold (COGS). Selling price means the price before sales tax or VAT.
How to use the markup calculator
- Enter any two values. Cost and selling price give the markup. Cost and markup give the selling price. Selling price and markup give the cost.
- Leave the other two fields empty. The calculator works them out and shows each step, so you can check it.
- Read the margin too. The result shows the same profit as a share of the selling price, because revenue reports and ad targets usually ask for margin, not markup.
- Add tax last. For a price with sales tax or VAT, use the selling price calculator and type your own rate.
How to calculate markup: worked examples
To calculate markup, subtract the cost from the selling price, divide the result by the cost and multiply by 100. To go the other way, multiply the cost by 1 plus the markup to get the selling price. The numbers below are made up to show the arithmetic; they are not benchmarks for any product or industry.
Markup percentage from cost and selling price
- Cost: 50. Selling price: 80.
- Profit = 80 - 50 = 30.00.
- Markup = 30.00 / 50 × 100 = 60.00%.
- Margin, for comparison = 30.00 / 80 × 100 = 37.50%.
Selling price from cost and markup, with tax on top
- Cost: 12.40. Markup: 45%.
- Selling price = 12.40 × 1.45 = 17.98.
- Profit = 17.98 - 12.40 = 5.58, a margin of 31.03%.
- Tax, if you charge it: at a rate of 8%, made up for this example, 17.98 × 8% = 1.44.
- Price including tax = 17.98 + 1.44 = 19.42.
The tax line sits outside the markup. Sales tax and VAT are collected from the customer and passed on, so markup and margin are worked out on the price before tax. Rates and rules depend on where you sell and what you sell, which is why the calculator asks for your rate and never suggests one.
Cost from selling price and markup
When you know the price and the markup, divide; do not subtract. A selling price of 120 at a 50% markup means a cost of 120 / 1.5 = 80.00 and a profit of 40.00. Taking 50% off the price gives 60.00, which is the cost at a 50% margin, not at a 50% markup.
Selling below cost: a negative markup
If the selling price is lower than the cost, profit and markup are both negative. A product that costs 50 and sells for 45 loses 5.00 a sale: a markup of -10.00% and a margin of -11.11%. The calculator shows that as a loss, not as an error. A cost of 0 is different: markup divides by cost, so it has no answer.
| Markup on a cost | Sum | Selling price | Profit | Margin |
|---|---|---|---|---|
| 40% markup on 100 | 100 × 1.4 | 140.00 | 40.00 | 28.57% |
| 20% markup on 500 | 500 × 1.2 | 600.00 | 100.00 | 16.67% |
| 50% markup on 10 | 10 × 1.5 | 15.00 | 5.00 | 33.33% |
| 25% markup on 80 | 80 × 1.25 | 100.00 | 20.00 | 20.00% |
| 100% markup on 100 | 100 × 2 | 200.00 | 100.00 | 50.00% |
Markup vs margin: what is the difference?
Markup and margin measure the same profit against different bases. Markup is profit as a percentage of cost; margin is profit as a percentage of the selling price. Because cost is smaller than price, markup is the larger number on any profitable sale: a product that costs 50 and sells for 80 has a 60% markup and a 37.5% margin.
| Markup | Margin | |
|---|---|---|
| Formula | (selling price - cost) / cost | (selling price - cost) / selling price |
| Profit is divided by | Cost | Selling price |
| Question it answers | How much do I add to my cost? | How much of each sale do I keep? |
| Used for | Setting a price from a cost | Judging profitability; break-even targets for ad spend |
| Upper limit | None: a price of three times cost is a 200% markup | Below 100%, unless the cost is 0 |
| Cost 50, price 80 | 60.00% | 37.50% |
How to convert markup to margin, and margin to markup
To convert a markup to a margin, divide it by 1 plus itself. To convert a margin to a markup, divide it by 1 minus itself. Use decimals in both: a 60% markup is 0.6 / 1.6 = 37.50% margin. The tables give common values, with the selling price each one produces on a cost of 100.
margin = markup / (1 + markup)
markup = margin / (1 - margin)| Markup | Margin | Multiplier | Price on a cost of 100 |
|---|---|---|---|
| 10% | 9.09% | 1.1 | 110.00 |
| 15% | 13.04% | 1.15 | 115.00 |
| 20% | 16.67% | 1.2 | 120.00 |
| 25% | 20.00% | 1.25 | 125.00 |
| 30% | 23.08% | 1.3 | 130.00 |
| 40% | 28.57% | 1.4 | 140.00 |
| 50% | 33.33% | 1.5 | 150.00 |
| 60% | 37.50% | 1.6 | 160.00 |
| 75% | 42.86% | 1.75 | 175.00 |
| 100% | 50.00% | 2 | 200.00 |
| 150% | 60.00% | 2.5 | 250.00 |
| 200% | 66.67% | 3 | 300.00 |
| 300% | 75.00% | 4 | 400.00 |
| Margin | Markup needed | Price on a cost of 100 |
|---|---|---|
| 10% | 11.11% | 111.11 |
| 15% | 17.65% | 117.65 |
| 20% | 25.00% | 125.00 |
| 25% | 33.33% | 133.33 |
| 30% | 42.86% | 142.86 |
| 40% | 66.67% | 166.67 |
| 50% | 100.00% | 200.00 |
| 60% | 150.00% | 250.00 |
| 70% | 233.33% | 333.33 |
| 75% | 300.00% | 400.00 |
| 80% | 400.00% | 500.00 |
The same percentage means two different prices. Read as a markup, 30% on a cost of 100 gives a price of 130.00 and a margin of 23.08%. Read as a margin, 30% needs a markup of 42.86% and a price of 142.86. Apply 30% as a markup when the plan called for a 30% margin, and every 100 of cost is underpriced by 12.86.
Margin
Looking for gross margin or net margin from revenue and costs? Use the margin calculator
How to calculate markup in Excel or Google Sheets
To calculate markup in Excel or Google Sheets, put the cost in one cell and the selling price in another, then divide the difference by the cost. With cost in A2 and selling price in B2, the formula is =(B2-A2)/A2. Format the cell as a percentage and copy it down the column for every product.
| To get | Formula | Result |
|---|---|---|
| Markup percentage | =(B2-A2)/A2 | 60.00% |
| Margin percentage | =(B2-A2)/B2 | 37.50% |
| Selling price from cost and markup | =A2*(1+C2) | 80.00 |
| Cost from selling price and markup | =B2/(1+C2) | 50.00 |
| Margin from markup | =C2/(1+C2) | 37.50% |
| Markup, blank when the cost is empty | =IF(A2=0,"",(B2-A2)/A2) | 60.00% |
Type the markup in C2 as 60% or 0.6, not as 60: a spreadsheet reads a plain 60 as 6,000%. The last formula stops a divide-by-zero error on rows where the cost has not been filled in.
What is cost-plus pricing, and where does it fall short?
Cost-plus pricing sets a selling price by adding a fixed markup to what a product costs. It is simple, and it makes sure each sale covers its direct cost. Its weakness is that it looks only inward: it ignores what customers are willing to pay, what competitors charge and how a price changes the number of people who buy.
- It ignores perceived value. Customers pay for what they believe a product is worth to them, not for what it cost you. The guide to perceived value covers how that belief forms and how to raise it.
- It passes cost changes straight into the price. When a supplier charges more, the same markup raises your price by the same percentage, whether or not customers will accept it.
- It treats every product alike. One markup across a catalog takes no account of which items customers compare closely and which they value most.
- It says nothing about volume. A markup sets the profit on one sale, not the number of sales. That half of the sum is covered below.
What does a markup have to cover?
A markup on direct cost is not profit yet. It first has to pay for everything the direct cost leaves out: overheads such as rent, software and salaries, payment and shipping costs, returns, and the cost of winning the sale. In the first example, a cost of 50 at a 60% markup leaves 30.00 on each sale. Say overheads come to 12.00 a unit and each order costs 10.00 to win (made-up figures again): 8.00 is left, which is 10.00% of the selling price.
Run the same sum backwards to find the lowest markup you can live with. Add overheads per unit, acquisition cost per order and the profit you need, then divide by the cost: (12.00 + 10.00 + 8.00) / 50 = 60.00%. That 30.00 of profit on each sale is also the product's break-even CPA: the most an order can cost to win before it loses money.
What is keystone pricing?
Keystone pricing is a retail shorthand for setting the selling price at double the cost: a 100% markup, which is a 50% margin. It is a rule of thumb that is quick to apply across a catalog, and it has the blind spots of any fixed markup. It says nothing about your overheads or about what customers will pay.
Should you raise your markup? Check it against your conversion rate
A markup change is a price change, and price is one of the things that decides how many visitors buy. A higher markup earns more on each order but may win fewer orders, so total profit rises only if the conversion rate holds up well enough. The calculator below finds that break-even point from your own numbers.
Markup change calculator
The conversion rate at which a new markup earns the same gross profit from the same visitors as the one you have now.
Break-even conversion rate
1.71%
Now: 50 cost at a 60% markup sells for 80.00 and earns 30.00 of gross profit per order. New: a 70% markup sells for 85.00 and earns 35.00.
Per 1,000 visitors at a 2% conversion rate you now earn 1,000 × 2% × 30.00 = 600.00. The new price earns the same at 2% × 30.00 ÷ 35.00 = 1.71%.
So the conversion rate can fall from 2% to 1.71%, a relative drop of 14.29%, before the higher markup earns less than you earn now.
At a 1.8% conversion rate the new price earns 630.00 per 1,000 visitors: 30.00 more than now (+5.0%).
This is arithmetic on your own numbers, not a forecast. Only a test shows what your conversion rate does at a new price.
Formula
break-even conversion rate = current rate * current profit per order / new profit per order
= current rate * current markup / new markup (same cost)The same markup change, two outcomes
Take the default numbers: a product that costs 50, sold at a 60% markup for 80.00, with 2% of visitors buying. Every 1,000 visitors bring 600.00 of gross profit. A 70% markup lifts the price to 85.00 and the profit on each order from 30.00 to 35.00. What it does to the total depends on the conversion rate at the new price:
| Conversion rate at the new price | Orders | Gross profit | Against today |
|---|---|---|---|
| 2% | 20 | 700.00 | 100.00 more (+16.7%) |
| 1.9% | 19 | 665.00 | 65.00 more (+10.8%) |
| 1.8% | 18 | 630.00 | 30.00 more (+5.0%) |
| 1.71% (break-even) | 17.14 | 600.00 | The same |
| 1.7% | 17 | 595.00 | 5.00 less (-0.8%) |
| 1.6% | 16 | 560.00 | 40.00 less (-6.7%) |
At 1.8% the higher markup earns 30.00 more from every 1,000 visitors. At 1.6% it earns 40.00 less. The line between them is 1.71%, a relative drop of 14.29%. Nothing in the arithmetic says which row you will land on. That depends on your customers, your competitors and how the price is presented, and the only way to know is to measure it.
How to test a markup change
- Find the break-even rate first. It tells you how much conversion you can afford to lose, before you spend any traffic on a test.
- Measure your baseline. Use the conversion rate calculator on the same page and dates you plan to test.
- Check you have the traffic. The difference you are looking for is small, and small differences need large samples. Telling a 2% conversion rate from 1.71% takes roughly 35,000 visitors per variant at 95% significance and 80% power. Run your own numbers in the A/B test sample size calculator.
- Judge it on profit per visitor. Conversion rate alone will usually favor the lower price. Multiply orders by the profit on each order, as the table does.
- Be careful with two prices at once. Showing different visitors different prices for the same product raises fairness questions and, in some places, legal ones. The guide to psychological pricing explains how to test pricing more safely, for example one price after another, or a new price on new products.
- Test the presentation as well. Often the cheaper experiment is to keep the markup and change how the price is shown: plan order, what is included, reassurance beside the button. See what to test on a pricing page.
If the conversion rate is what holds a price back, look at the page where the price is shown. Convertica's free CRO audit runs eight checks on it, from first impressions and calls to action to trust, mobile experience and page performance, scores each out of 100 and gives you three fixes.
What is a good markup percentage?
A good markup percentage is one that covers your direct cost, your overheads and the cost of winning each sale, leaves the profit you need, and still gives a price customers accept. There is no universal figure. Your costs set the lowest markup you can live with; your customers set the highest one that still sells.
That is why this page has no table of typical markups by industry. An average across businesses with different costs, volumes and customers cannot tell you what your own product needs. The floor comes from the sum under what a markup has to cover. The ceiling comes from a test.
Common markup mistakes
- Using a markup when you mean a margin. A 30% margin target applied as a 30% markup underprices by 12.86 for every 100 of cost.
- Marking up the purchase price only. Freight, packaging, payment fees and returns are part of what a unit costs you.
- Counting tax as price. Work out markup on the price before sales tax or VAT, not on what the customer pays at checkout.
- Discounting without redoing the sum. A discount comes off the price, not off the markup. A 20% discount on a product that costs 50 and sells for 80 leaves a price of 64.00 and a profit of 14.00: the markup falls from 60% to 28.00%, not to 40%.
Related calculators
Markup sets the price of one sale. These calculators cover what happens around it.
See all free tools and how they fit together.
Markup calculator FAQ
What does a markup calculator do?
A markup calculator works out the markup percentage, selling price, cost or profit of a product from any two of those numbers. Markup is profit divided by cost. With a cost of 50 and a selling price of 80, profit is 30 and markup is 30 / 50 = 60%.
How do you calculate markup?
Subtract the cost from the selling price to get the profit, divide the profit by the cost and multiply by 100: markup % = (selling price - cost) / cost × 100. For a product that costs 50 and sells for 80, that is (80 - 50) / 50 × 100 = 60%.
What is a 40% markup on 100?
A 40% markup on a cost of 100 adds 40, so the selling price is 100 × 1.4 = 140. The profit is 40 and the margin is 40 / 140 = 28.57%. A 20% markup on 500 works the same way: 500 × 1.2 = 600.
Is a 30% markup the same as a 30% margin?
No. A 30% markup means profit is 30% of the cost; a 30% margin means profit is 30% of the selling price. A 30% markup is a 23.08% margin, and a 30% margin needs a 42.86% markup. On a cost of 100, that is a price of 130.00 against 142.86.
How do I convert markup to margin?
Divide the markup by 1 plus the markup, with both as decimals: margin = markup / (1 + markup). A 60% markup is 0.6 / 1.6 = 37.5% margin. To go back, markup = margin / (1 - margin): a 20% margin is a 25% markup, and a 50% margin is a 100% markup.
How do I calculate selling price from cost and markup?
Multiply the cost by 1 plus the markup as a decimal: selling price = cost × (1 + markup). A cost of 50 at a 60% markup is 50 × 1.6 = 80. Sales tax or VAT is added on top of that price and is not part of the markup.
How do I work out the cost from the selling price and markup?
Divide the selling price by 1 plus the markup: cost = selling price / (1 + markup). A price of 120 at a 50% markup means a cost of 120 / 1.5 = 80. Do not take 50% off the price: that gives 60, which is the cost at a 50% margin.
Should I use markup or margin?
Use markup when you set a price from a cost, because it tells you what to add. Use margin when you judge profitability, because revenue reports and break-even targets for ads are based on the selling price. Both describe the same profit, so label which one a number is.
Can markup be negative?
Yes. If you sell below cost, the profit is negative and so is the markup. A product that costs 50 and sells for 45 has a markup of -10% and loses 5 on each sale before any other costs. Markup is not defined when the cost is 0.