The markup formulas
- Markup % = (price − cost) ÷ cost × 100
- Selling price = cost × (1 + markup)
- Cost from price and markup = price ÷ (1 + markup)
- Markup → margin: margin = markup ÷ (1 + markup)
Example: you buy a backpack for $32 and want a 75% markup. The price is 32 × 1.75 = $56. Profit is $24, which is a 42.9% margin.
Common markups and what they mean
| Markup | Price on a $10 cost | Margin |
|---|---|---|
| 30% | $13.00 | 23.1% |
| 50% | $15.00 | 33.3% |
| 100% (keystone) | $20.00 | 50% |
| 150% | $25.00 | 60% |
| 200% | $30.00 | 66.7% |
When markup is the better tool
Markup is natural when every product has a known landed cost and you apply a standard rule per category — for example 80% on accessories and 40% on electronics. It is also how most wholesale and distribution price lists are built: each step in the chain adds its markup to the price it paid.
If you sell through distributors or retailers, the wholesale price calculator walks the whole chain from your cost to the shelf price.
Markup mistakes to avoid
- Using the ex-works cost. Add freight, duties and packaging to get the landed cost before applying a markup.
- Stacking discounts on top of a thin markup. A 20% sale on a 30% markup leaves almost nothing. Check with the discount calculator.
- Confusing markup with margin in supplier or retailer negotiations — always say which one you mean.