What is markup?
Markup is the amount added to a product's cost to set its selling price, written as a percentage of the cost. It is the most common way shops, wholesalers and tradespeople price goods: take the cost, add a standard markup, and the price follows.
Markup formulas
- Selling price = cost × (1 + markup ÷ 100)
- Markup % = (price − cost) ÷ cost × 100
- Margin % = markup ÷ (1 + markup)
Markup vs margin
Markup is measured against cost; margin against price. The same sale always shows a bigger markup than margin. When targets are set as margins, for example by an investor or a franchise, use the profit margin calculator to price directly from the margin.
To see how many units you must sell at your marked-up price, use the break-even calculator.