Markup Calculator
Print| Gross Profit Amount | $0.00 |
The Markup Calculator enables business owners, retailers, contractors, and e-commerce sellers to calculate retail selling prices, markup percentages, dollar gross profit, and cost multipliers based on cost of goods sold (COGS). Convert seamlessly between markup and gross profit margin.
The Retail Markup Formulas
Markup expresses gross profit as a percentage of wholesale cost (COGS), whereas margin expresses profit as a percentage of retail selling price:
Dollar Gross Profit ($) = Selling Price - Cost of Goods Sold (COGS)
Markup Percentage (%) = ( Dollar Gross Profit / Cost of Goods Sold ) × 100
Selling Price = Cost of Goods Sold × ( 1 + ( Markup % / 100 ) )
Cost Multiplier = 1 + ( Markup % / 100 )
Where:
- Cost of Goods Sold (COGS): Direct unit cost to manufacture, import, or purchase inventory.
- Markup Percentage (%): Percentage added onto cost to establish selling price.
- Cost Multiplier: Factor multiplied by COGS to quickly determine retail price (e.g., 1.50 multiplier for a 50% markup).
Markup Tiers & Margin Equivalent Benchmarks
Compare selling prices, dollar profit, and equivalent gross profit margins across common retail markup benchmarks for a $40 COGS item:
| Markup Percentage (%) | Cost Multiplier | Selling Price ($40 COGS) | Dollar Gross Profit | Equivalent Gross Margin % |
|---|---|---|---|---|
| 25% Markup | 1.25x | $50.00 | $10.00 | 20.00% Margin |
| 50% Markup | 1.50x | $60.00 | $20.00 | 33.33% Margin |
| 100% Markup (Keystone) | 2.00x | $80.00 | $40.00 | 50.00% Margin |
| 200% Markup | 3.00x | $120.00 | $80.00 | 66.67% Margin |
Step-by-Step Markup Calculation Example
Here is an example calculating retail selling price and equivalent margin for a product costing $25.00 COGS with a 60% markup:
- Identify Inputs: COGS = $25.00, Markup = 60% (0.60).
- Calculate Cost Multiplier:
1 + 0.60 = 1.60 multiplier. - Calculate Retail Selling Price:
$25.00 × 1.60 = $40.00 selling price. - Calculate Dollar Gross Profit:
$40.00 - $25.00 = $15.00 gross profit. - Convert Markup to Equivalent Margin:
($15.00 / $40.00) × 100 = 37.50% gross margin.
Frequently Asked Questions
What is the difference between markup and margin?
Markup measures profit as a percentage of wholesale cost (Profit / Cost). Margin measures profit as a percentage of retail selling price (Profit / Price).
Can markup be greater than 100%?
Yes! Markup compares profit to cost. If a product costing $10 is sold for $30, the profit is $20, resulting in a 200% markup (66.67% margin).
How do I convert markup to gross margin?
To convert markup percentage to margin percentage: Margin = Markup / ( 1 + Markup ) (e.g., 100% markup converts to 1.00 / 2.00 = 50% margin).
What is a standard retail markup percentage?
Standard retail markup typically ranges from 50% to 100% (Keystone pricing) depending on industry, category turnover speed, and overhead costs.