01
What is markup?
Markup is the amount added to a product's cost to reach its selling price, expressed as a percentage of that cost. It helps small-business owners and sellers see how far a price sits above the direct unit cost.
The base matters: markup is always calculated relative to cost. If an item costs $60 and sells for $100, the $40 unit profit is 66.67% of the $60 cost.
02
How to calculate markup
Subtract cost per unit from selling price per unit to find profit per unit. Divide that profit by cost per unit, then multiply by 100.
Profit per Unit = Selling Price per Unit − Cost per Unit
Markup % = Profit per Unit ÷ Cost per Unit × 100
Cost must be above zero to calculate markup. When cost is zero, this calculator reports markup as N/A.
03
Markup vs profit margin
Markup and margin describe the same unit profit from different reference points. Markup divides profit by cost, while profit margin divides profit by selling price.
Markup % = Profit per Unit ÷ Cost per Unit × 100
Profit Margin % = Profit per Unit ÷ Selling Price per Unit × 100
With a $60 cost and a $100 selling price, markup is 66.67% but margin is 40%. Markup and margin cannot be used interchangeably when setting or reviewing prices.
04
How to convert markup to margin
If you already know a markup percentage, convert it to margin with this formula:
Margin % = Markup % ÷ (100 + Markup %) × 100
For example, 66.67 ÷ 166.67 × 100 is approximately 40%. This conversion is provided for information and is not an additional mode in the calculator form.
05
How to convert margin to markup
If you know the desired margin percentage, convert it to the corresponding markup with this formula:
Markup % = Margin % ÷ (100 − Margin %) × 100
A 40% margin converts to 40 ÷ 60 × 100, or 66.67% markup. This conversion is informational and does not add a target-margin or target-markup mode to the form.
06
Markup calculation example
Suppose one unit costs $60, sells for $100, and you plan to sell 100 units.
- Profit per Unit: $100 − $60 = $40.
- Markup: $40 ÷ $60 × 100 = 66.67%.
- Profit Margin: $40 ÷ $100 × 100 = 40%.
- Total Profit: $40 × 100 units = $4,000.
The totals assume every entered unit is sold at the same price and carries the same direct unit cost.
07
Common markup mistakes
- Treating a markup percentage as if it were the same margin percentage.
- Dividing by selling price when the goal is to calculate markup, which must use cost as its base.
- Forgetting costs such as packaging, payment fees, or freight when deciding what belongs in unit cost.
- Assuming unit profit is final business profit without considering overhead, taxes, returns, or unsold inventory.
- Rounding a price too early and then expecting totals to match calculations made with the unrounded figure.
08
Frequently asked questions
What is the difference between markup and margin?
Markup measures profit per unit as a percentage of cost per unit. Margin measures profit per unit as a percentage of selling price. Because they use different bases, the percentages are not interchangeable.
Is a 50% markup the same as a 50% margin?
No. A 50% markup on a $60 cost produces a $90 selling price and a 33.33% margin. A 50% margin on a $60 cost requires a $120 selling price, which is a 100% markup.
Can markup be higher than 100%?
Yes. Markup is higher than 100% when profit per unit is greater than cost per unit. For example, a $40 cost and a $100 selling price produce a 150% markup.
Can markup or margin be negative?
Yes. If selling price is below cost, profit per unit is negative, so both markup and margin are negative. This indicates a loss on each unit before any additional expenses.
How do I calculate a selling price from a target markup?
Multiply cost per unit by 1 plus the target markup expressed as a decimal. For example, a $60 cost with a 50% target markup gives $60 × 1.50 = $90. This calculator does not include a target-markup input mode.
Why is markup unavailable when cost is zero?
Markup divides profit per unit by cost per unit. Division by zero is undefined, so the calculator shows N/A instead of NaN or infinity when cost is zero.
Does changing Currency convert cost or selling price?
No. Currency changes the symbol and display formatting only. Enter cost and selling price in one consistent currency.