Markup Calculator
Calculate optimal selling prices, markup percentages, and gross margins from unit production costs.
Last verified: September 2026Inputs & Parameters
Calculation Results
A 50.00% markup on $40.00 cost yields a $60.00 price and 33.33% profit margin.
Setting Prices: Markup vs. Profit Margin
Cost markup is the percentage increment added to the unit cost of goods sold (COGS) to arrive at a profitable retail selling price. Understanding markup formulas ensures businesses set pricing that protects gross margins after accounting for trade discounts or merchant fees.
Core Mathematical Formulas
- Selling Price:
Selling Price = Cost × (1 + Markup% / 100) - Gross Profit:
Gross Profit = Selling Price - Cost - Equivalent Profit Margin%:
Margin% = (Gross Profit / Selling Price) × 100 - Markup to Margin Conversion:
Margin% = Markup% / (1 + Markup%)
Worked Example
A retailer purchases goods at a unit wholesale cost of $40.00 and applies a 60.00% markup:
1. Selling Price = $40.00 × (1 + 0.60) = $64.00
2. Gross Profit = $64.00 - $40.00 = $24.00
3. Equivalent Gross Margin = ($24.00 / $64.00) × 100 = 37.50%
Assumptions & Limitations
Calculations reflect gross product profitability. Net profitability must account for overhead expenses, marketing acquisition costs, payment processor fees (2%–3%), and sales tax obligations.