Calculate the selling price from your cost and desired markup percentage. Understand the difference between markup and profit margin, and price your products competitively.
Typical markup percentages across common business types
Enter your product cost and target markup to find the right selling price and profit margin instantly.
Open Percentage Calculator →Markup is the amount added to the cost of a product to arrive at its selling price, expressed as a percentage of the cost:
Markup% = (Selling Price − Cost) ÷ Cost × 100
Selling Price = Cost × (1 + Markup% ÷ 100)
Example: A retailer buys a jacket for $50 and applies a 100% markup:
Selling Price = $50 × (1 + 100/100) = $50 × 2 = $100
Profit = $100 − $50 = $50
Note that even though the markup is 100%, the profit margin is only 50% — because margin is calculated on the selling price, not the cost.
This is one of the most common sources of confusion in business pricing. Markup and profit margin are related but measure fundamentally different things:
Markup is expressed as a percentage of cost. A 50% markup on a $100 item means you add $50, selling for $150.
Profit margin is expressed as a percentage of the selling price. On that same item, profit $50 on a $150 selling price = 33.3% gross margin.
The conversion formulas:
Margin% = Markup% ÷ (100 + Markup%) × 100
Markup% = Margin% ÷ (100 − Margin%) × 100
Common equivalents to memorize: 20% markup = 16.7% margin | 50% markup = 33.3% margin | 100% markup = 50% margin | 200% markup = 66.7% margin.
Understanding what's normal in your industry is essential for competitive pricing:
Grocery/food retail: 15–25% markup (thin margins, high volume)
Consumer electronics: 10–30% markup (competitive, commoditized)
Clothing & apparel: 100–300% markup (brand value, seasonality)
Furniture: 200–400% markup (showroom costs, low turnover)
Restaurants: 200–300% on food; 400–600% on alcoholic beverages
Jewelry: 100–200% markup (high perceived value)
Software/SaaS: 200%+ (near-zero marginal cost once built)
Industries with higher markups typically have higher overhead, slower inventory turnover, or significant brand value that justifies premium pricing.
Keystone pricing is a traditional retail formula where products are sold at exactly double their wholesale cost — a 100% markup yielding a 50% gross margin. It's called "keystone" because it was historically the standard cornerstone of retail pricing strategy.
The appeal of keystone pricing is its simplicity: buy low, sell at 2×, cover overhead from that 50% margin. However, it has significant limitations. It ignores competitive pricing dynamics, doesn't account for varying overhead by product category, and can result in either leaving money on the table (for high-demand items) or pricing yourself out of the market (for highly competitive categories).
Modern retailers use keystone as a starting point and adjust based on competition, demand signals, and category strategy. Some products are priced below keystone (loss leaders) while others exceed it significantly.
Effective pricing isn't just about applying a fixed markup. Consider these factors: Know your total costs — COGS is just the start; factor in labor, rent, shipping, and overhead. Research competitor prices — your markup must result in a price the market will bear. Value-based pricing — for differentiated products, customers may pay a premium regardless of your cost. Volume considerations — lower markup on high-volume items can generate more total profit than high markup on slow-moving inventory.
Markup% = (Selling Price − Cost) ÷ Cost × 100. Cost $40, price $100: ($100−$40)/$40×100 = 150% markup. To find price from markup: Price = Cost × (1 + Markup%/100).
Markup is based on cost; margin is based on selling price. A 100% markup = 50% profit margin. A 50% markup = 33.3% margin. They describe the same profit in different terms.
It depends on your industry: electronics 10–30%, clothing 100–300%, restaurants 200–300% on food. Research your industry's average gross margins and work backwards to the markup needed to achieve them after all costs.
Keystone pricing means selling at exactly double the cost (100% markup = 50% margin). It's a traditional retail standard that's simple to apply but should be adjusted based on competition, demand, and true overhead costs.