How to Use This Calculator
Select a mode: By Markup to set a percentage above your cost, By Margin to set a target profit margin, or By Price to enter a known selling price and see the resulting markup and margin. Enter your cost and the calculator shows the full pricing breakdown instantly.
Markup vs Margin
These two terms are often confused but calculate differently. Markup is the percentage added to the cost: a $100 item with 50% markup sells for $150. Margin is the percentage of the selling price that is profit: that same $150 sale has a 33.3% margin. Markup is always higher than margin for the same transaction.
Common Markup Benchmarks
Typical markups vary by industry. Grocery stores often use 5-15% markup, while clothing retailers commonly use 100-300% (known as keystone or triple keystone). Restaurants typically mark up food 200-300% and beverages even higher. Software and digital products can have markups exceeding 1000% due to low marginal costs.
Setting the Right Price
Your markup needs to cover all operating expenses beyond the direct cost of goods — rent, labor, marketing, and utilities — while still generating profit. Consider your competitors' pricing and your target customers' willingness to pay. A higher markup allows fewer sales to reach profitability, while a lower markup may drive higher volume.