Markup Calculator Guide: Set Prices Correctly from Cost
Markup and margin are the two most confused pricing concepts in business. Understanding both — and the relationship between them — is essential for pricing products profitably.
Markup vs Margin: Side by Side
Markup (% of cost)
Margin (% of price)
Same ₹400 profit, but markup (66.7%) is always larger than margin (40%) because the denominator is smaller.
Markup to Margin Conversion Table
| Markup % | Margin % | Markup % | Margin % |
|---|---|---|---|
| 10% | 9.1% | 75% | 42.9% |
| 20% | 16.7% | 100% | 50% |
| 25% | 20% | 150% | 60% |
| 33% | 24.8% | 200% | 66.7% |
| 50% | 33.3% | 300% | 75% |
Frequently Asked Questions
What is markup?
Markup is the amount added to the cost price of a product to arrive at the selling price, expressed as a percentage of cost. Markup % = (Selling Price − Cost) ÷ Cost × 100. If cost is ₹400 and selling price is ₹600, Markup = 200÷400×100 = 50%.
What is the difference between markup and margin?
Markup is calculated as a % of cost. Margin is calculated as a % of selling price. Same situation (cost ₹400, sell ₹600): Markup = 50%, Margin = 33.3%. Markup is always higher than margin for the same profit. Many businesses confuse these terms — always clarify which basis is being used.
How do I calculate selling price from cost and markup?
Selling Price = Cost × (1 + Markup ÷ 100). If cost is ₹500 and markup is 40%: Selling Price = ₹500 × 1.40 = ₹700.
What markup do I need to achieve a target margin?
Markup % = Margin % ÷ (1 − Margin % ÷ 100). To get 30% margin: Markup = 30 ÷ (1 − 0.30) = 30 ÷ 0.70 = 42.86%. So a 42.86% markup gives a 30% margin.
What markup do different businesses typically use?
Retail apparel: 100–300% markup (2–4x cost). Restaurants: 200–400% on food (but 300–600% on beverages). Electronics retail: 10–30% markup (thin margins). Jewellery: 50–100% markup. Handmade goods / craft: 2–3x material cost is a starting guide, adjusted for labour.
Related Calculators
Calculate Selling Price & Markup
Enter cost and markup % to get selling price, profit, and gross margin instantly.
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