Marketing ROI
Markup Calculator
Markup is (price − cost) ÷ cost: an item costing $40 and selling for $100 carries a 150% markup — and a 60% gross margin, which is not the same thing. Enter your cost and price below for markup, margin and profit, or set a target markup and let the calculator price the item for you.
What is the difference between markup and margin?
Markup is profit measured against cost; margin is the same profit measured against price. A $40 cost sold at $100 makes $60 profit — that is a 150% markup ($60 ÷ $40) but a 60% margin ($60 ÷ $100). Margin can never exceed 100%; markup can be any size. Confusing them is expensive: pricing for a ‘50% margin’ using markup maths quietly gives you a 33% margin instead.
How it works
Markup is how most small businesses actually set prices: take the cost, add a percentage. Whether you searched for a markup calculator, a margin calculator or a price markup calculator, you need both formulas, because markup and margin describe the same profit through different denominators:
Markup % = (selling price − cost) ÷ cost × 100Gross margin % = (selling price − cost) ÷ selling price × 100Price from markup = cost × (1 + markup % ÷ 100)The conversion between them is exact: margin = markup ÷ (1 + markup). So a 100% markup (doubling your money) is a 50% margin, and a 25% markup is only a 20% margin. Accountants, investors and marketplaces talk in margin; shopkeepers and pricers talk in markup. This calculator shows both, always, so the conversation never gets lost in translation.
Markup to margin conversion table
| If your markup is… | …your gross margin is | Example: cost $50 sells for |
|---|---|---|
| 25% | 20.0% | $62.50 |
| 50% | 33.3% | $75.00 |
| 100% | 50.0% | $100.00 |
| 150% | 60.0% | $125.00 |
| 200% | 66.7% | $150.00 |
| 300% | 75.0% | $200.00 |
| 400% | 80.0% | $250.00 |
Source: The identity margin = markup ÷ (1 + markup), applied to each row. Last verified: November 2026
Worked examples
Example 1 — a $40 product sold at $100
| Cost | $40.00 |
| Selling price | $100.00 |
| Profit per unit | $60.00 |
| Markup | 150% |
| Gross margin | 60.0% |
Example 2 — pricing from a target markup of 80% on a $25 cost
| Cost | $25.00 |
| Target markup | 80% |
| Selling price | $45.00 |
| Profit per unit | $20.00 |
| Gross margin | 44.4% |
Note the margin is 44.4%, not 80% — the classic markup/margin mix-up, caught before it reaches a price tag.
Example 3 — a $120 product sold at $150
| Cost | $120.00 |
| Selling price | $150.00 |
| Profit per unit | $30.00 |
| Markup | 25% |
| Gross margin | 20.0% |
When these fees apply — and the limitations
Markup maths is exact; what it leaves out is everything around the product:
- Gross margin is not net profit. Rent, salaries, marketing and software still come out of it. A 60% gross margin can still be a loss-making business.
- Per-sale fees eat the margin. If the item sells on Etsy, roughly 9.5% + $0.45 of the price goes in fees; on your own store, about 3% in processing. For fee-adjusted pricing on Etsy, use the dedicated Etsy pricing calculator.
- ‘Cost’ must be the full unit cost — materials, packaging, inbound shipping and wastage — or the markup flatters you.
- Discounts come off the price, not the markup. A 20%-off sale on Example 1 cuts the price to $80, the profit to $40, and the margin to 50%.
Comparing your options
Markup sets the price; the business question is whether that price sells enough units to cover your overheads. Pair this with the break-even calculator to turn margin into a sales target, and if you sell on Etsy, the Etsy pricing calculator applies the same logic with Etsy’s fees already inside the formula.
Frequently asked questions
How do I calculate markup percentage?
Subtract cost from price, divide by the cost, and multiply by 100. A product costing $40 and selling at $100: ($100 − $40) ÷ $40 × 100 = 150% markup. To go the other way — from a markup to a price — multiply the cost by (1 + markup ÷ 100): $40 × 2.5 = $100.
Is a 100% markup the same as a 100% margin?
No — a 100% margin is impossible on an ordinary sale, because margin is profit divided by price and profit cannot exceed the price. A 100% markup means you doubled the cost: cost $50, price $100, profit $50 — which is a 50% margin. The conversion is margin = markup ÷ (1 + markup).
What is a good markup for retail products?
It varies enormously by category: grocery runs on markups of 5–25%, clothing commonly 100–350% (the traditional ‘keystone’ retail markup is 100%), handmade and craft goods typically 100–150% on full costs, and digital products have near-zero marginal cost, so their markup is effectively unbounded. The right question is whether the resulting gross margin covers your fixed costs at realistic volumes — which is a break-even calculation, not a rule of thumb.
How do I get a 50% margin?
Set the price at exactly double the cost. Margin = (price − cost) ÷ price = 50% requires profit to equal half the price, so price = 2 × cost — which is a 100% markup. In general, the markup needed for a target margin is margin ÷ (1 − margin): for a 60% margin, markup = 0.6 ÷ 0.4 = 150%.
Should my cost include shipping and packaging?
Yes, if you want the margin to be true. ‘Cost’ should be the complete cost of getting one unit ready and delivered as far as you pay for delivery: product, packaging, inbound freight, and a share of damaged or returned units. Sellers who cost only the product itself routinely discover their real margin is 5–15 points below the one on their spreadsheet.
Related calculators
Estimates only. Platforms can change their fees at any time; always confirm the rate on the platform’s own pricing page before making pricing decisions. ToolFees is not affiliated with the platform named on this page.