How markup calculator works
Markup is how much you add to a product cost to set its selling price, expressed as a percentage of that cost. A 50% markup on a $100 item adds $50, giving a $150 price. It is the most common way retailers and service businesses turn a unit cost into a quoted price.
Profit margin is a different number that confuses many people: it is the same profit expressed as a percentage of the selling price instead of the cost. That same $50 profit on a $150 price is a 33.33% margin. The same dollars, two different percentages, because the bases differ (cost versus price).
Enter the unit cost and a markup percentage. The tool computes the selling price (cost times one plus the markup divided by 100), the profit per unit, and the equivalent profit margin so the markup-vs-margin distinction is visible at a glance. A 100% markup (keystone) doubles the cost and always equals a 50% margin.
Frequently asked questions
What is the difference between markup and margin?
Both describe profit as a percentage, but from different bases. Markup is profit divided by the cost; margin is profit divided by the selling price. A 50% markup on a $100 cost gives a $150 price and $50 profit, which is a 33.33% margin. Because the price is always larger than the cost, the margin percentage is always smaller than the markup percentage for the same profit.
What is keystone markup?
Keystone pricing is a 100% markup - you double the cost to set the price. It is a traditional retail rule of thumb. Because the profit equals the cost, keystone always produces a 50% profit margin regardless of the cost figure.
Can I use this to find the markup from a price I already have?
This calculator goes forward, from cost plus markup percent to a selling price. To work backward from a known price, subtract the cost to get the profit, then divide the profit by the cost and multiply by 100 to find the markup percent.
Why does margin matter if I already know my markup?
Margin is what financial statements report and what investors compare, because it measures how much of each sales dollar survives as profit. Two products with the same markup can have very different business economics once volume and fixed costs are considered, so tracking margin keeps pricing decisions honest.
