Free tool
Price markup calculator
Set a price from landed cost and markup, or enter a price to see its markup and margin.
Your cost and pricing
Selling price
$48.00
- Profit per unit
- $18.00
- Markup on cost
- 60%
- Margin on price
- 37.5%
Markup divides profit by cost; margin divides it by selling price. Start with landed cost so freight and other inbound charges are included.
Markup to margin
- 25% markup
- 20% margin
- 50% markup
- 33.3% margin
- 100% markup (keystone)
- 50% margin
The formula
Price = cost × (1 + markup percentage)
Profit = price − cost
Margin percentage = markup percentage ÷ (1 + markup percentage)
- Cost
- Landed cost of one unit, including inbound charges.
- Markup
- Profit divided by cost, expressed as a percentage.
- Margin
- Profit divided by selling price, expressed as a percentage.
Worked example
- At a $30 landed cost and 60% markup, price is $30 × 1.6 = $48.
- Profit is $48 − $30 = $18.
- Margin divides profit by price: $18 ÷ $48 = 37.5%.
- For comparison, the conversion table shows 25% markup is a 20% margin, 50% markup is a 33.3% margin, 100% markup is a 50% margin.
When it applies
- Setting a selling price from a known landed cost and desired markup.
When it breaks down
- At zero cost, markup has no denominator and is undefined.
- A price still has to account for demand, competition, fees and tax.
Common mistakes
Confusing markup with margin
A 50% markup on cost produces a 33.3% margin on selling price.
Using purchase price alone
Include freight and other inbound costs in landed unit cost.
Stacking percentages
Multiple markups on different bases do not simply add together.
Questions
What is a good markup percentage?
It depends on landed cost, operating expenses, demand and the margin the business needs.
What is the difference between markup and margin?
Markup divides profit by cost; margin divides the same profit by selling price.
Why is markup higher than margin?
For a profitable sale, cost is less than selling price, so dividing profit by cost gives a larger percentage.
How do you calculate markup percentage?
Subtract cost from price, divide by cost, then multiply by 100.
What is keystone markup?
A 100% markup doubles cost into price, which gives a 50% margin.
Related
Published by Skuvelo. Results are estimates computed from the figures you enter, not a reading of your own sales or stock.
A calculator answers once. Skuvelo keeps answering.
This tool computes one number from what you type. Skuvelo computes it continuously, for every SKU, from your own sales and stock.