Markup Calculator
Calculate your target selling price from unit cost and markup percentage, or solve for markup on cost. Features direct educational comparisons between markup and profit margin.
Input Parameters
0ms Local EngineMarkup is calculated from cost. Margin is calculated from selling price. That is why markup % is always higher than profit margin %.
₹150
23.08%
- Calculate Markup Amount: ₹500 × (30% ÷ 100) = ₹150
- Calculate Selling Price: Cost (₹500) + Markup (₹150) = ₹650
- Equivalent Profit Margin: (Markup ₹150 ÷ Selling Price ₹650) × 100 = 23.08%
Understanding Commercial Markup
Learn how to set profitable retail prices using cost-plus markup formulas and avoid underpricing your products.
1. What is Markup?
Markup is the percentage added to the wholesale or manufacturing cost of an item to establish its final retail selling price. It ensures that the revenue generated covers both direct unit costs and indirect business overhead while leaving a commercial profit.
2. Mathematical Formulas
Markup Amount = Selling Price - Cost
Markup % = (Markup Amount ÷ Cost) × 100
Selling Price = Cost × (1 + (Markup % ÷ 100))
3. Educational Comparison: Markup is NOT Margin
A retail business that needs a 30% profit margin cannot simply add 30% markup to its costs:
- Suppose an item costs ₹500.
- Adding a 30% markup yields a selling price of ₹650 (profit of ₹150).
- However, the resulting profit margin is only 23.08% (₹150 ÷ ₹650), NOT 30%.
- To achieve a true 30% profit margin, the selling price must be: ₹500 ÷ (1 - 0.30) = ₹714.29 (which requires a 42.86% markup).
- Cost Basis of Zero: Markup percentage is mathematically undefined when product cost is zero because division by zero has no solution.
- GST Inclusion: When calculating retail markup in India, ensure you account for statutory GST so that your target profit is not eroded by tax liabilities.
Frequently Asked Questions on Markup
Everything you need to know about setting retail markups and distinguishing markup from margin.
How is markup calculated from product cost?
Why is markup percentage different from profit margin?
How do you find the markup percentage if you know cost and selling price?
Can markup exceed 100%?
What happens if product cost is zero?
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