Markup & Margin Calculator
Fill in any two fields — cost, markup %, margin %, or price — and the other two update automatically. Convert markup to margin, price to margin, or cost + margin to price in one step.
Result
Common conversions
| Markup | = Margin | = Price on $100 cost |
|---|---|---|
| 25% | 20% | $125 |
| 50% | 33.3% | $150 |
| 75% | 42.9% | $175 |
| 100% (keystone) | 50% | $200 |
| 150% | 60% | $250 |
| 200% | 66.7% | $300 |
| 300% | 75% | $400 |
Markup vs margin: the confusion that costs money
Every retailer eventually gets bitten by this. A supplier says "you'll make a 50% margin" and the buyer hears "50% markup" — the two are wildly different:
- 50% markup on $10 cost = $15 price → $5 profit → 33% margin
- 50% margin on $15 price = $7.50 profit → cost is $7.50 → 100% markup
If you're negotiating with a distributor, always clarify which one they mean — and always run the math yourself before you agree.
Typical retail markups
| Category | Typical markup | Why |
|---|---|---|
| Grocery (packaged) | 15–25% | Low value-add, high volume, thin margin |
| Grocery (fresh produce) | 60–100% | High shrinkage, refrigeration cost |
| Clothing (mass market) | 100% (keystone) | Retail standard for decades |
| Clothing (boutique) | 150–300% | Slower turnover, higher rent, brand cachet |
| Restaurant food | 200–300% | Labour, rent, waste all baked in |
| Restaurant drinks | 300–500% | Where actual profit lives |
| Furniture | 150–400% | Slow turnover, warehouse costs |
| Jewellery | 100–300% | Insurance, security, low velocity |
| Electronics (mass) | 10–25% | Commodity pricing, price-sensitive shoppers |
| Books | ~40% | Publisher-set retail prices |
How to set your own markup
Every business has different fixed costs, so there's no universal answer. A rough process:
- Calculate your break-even point — the minimum sales you need at each candidate price.
- Look at competitor pricing. Are they undercutting you? Charging more? Why?
- Estimate realistic monthly volume at each price. Higher price usually means lower volume — often not in a straight line.
- Pick the price where volume × margin maximises expected profit. This is often not the highest margin, and rarely the lowest.
- Test. Real markets don't behave like spreadsheets. A/B test prices when you can.
Related tools
- Break-even calculator — how many units you need to sell at each price
- VAT calculator — add VAT to your ex-VAT price
- Discount calculator — how much of your margin a promotion actually eats
FAQ
What's the difference between markup and margin?
Markup is profit expressed as a percentage of cost — the amount added on top. Margin is profit expressed as a percentage of the selling price. A product bought for $10 and sold for $15 has a 50% markup ($5 on $10) but only a 33% margin ($5 on $15). They describe the same $5 profit from different angles.
Which one should I use for pricing?
Retailers and product businesses usually think in markup ("we do a 2× markup on all SKUs") because they buy at cost and set the price. Investors, finance teams, and accountants prefer margin because it's what shows up on P&L statements and is directly comparable across companies of different sizes.
How do I convert markup to margin?
Markup as decimal m gives margin = m / (1 + m). So 50% markup → 0.5 / 1.5 = 33.3% margin. 100% markup → 1 / 2 = 50% margin. 200% markup → 2 / 3 = 66.7% margin. Or use this calculator — set your markup and read the margin directly.
What's a keystone markup?
'Keystone' is retail jargon for a 100% markup, i.e. selling for double the cost. If you buy widgets for $10 and sell them for $20, you're keystoning. It gives a 50% margin — enough to cover typical retail overhead, sales staff, and rent while still turning a profit.