What the result shows
The selling price for the markup entered, the profit and gross margin it leaves on each unit, and the markup needed to reach your target margin.
Markup Calculator: Selling Price and Margin
Turn a product cost and markup into a selling price, then see the profit and gross margin that price leaves.
Price a product from its cost
Enter what one unit costs you, the markup you plan to add and the gross margin you want to keep.
Selling price at this markup
$40.00
A 60.0% markup leaves a 37.5% gross margin, below the 50.0% you want. A 100.0% markup, a price of $50.00, reaches it.
- Profit per unit
- $15.00
- Gross margin at this price
- 37.5%
- Markup needed for the target margin
- 100.0%
- Price for the target margin
- $50.00
Set a price that keeps the margin you need.
How it is calculated
Multiply product cost by one plus the markup to find the selling price. Divide profit by selling price for gross margin. The markup for a target margin is the margin divided by one minus the margin.
How to use it
Compare the margin with your target before setting the price. Then check that what is left covers shipping, payment fees, ads and overhead, because markup is worked out from product cost alone.
Worked example
A product costs $25. A 60% markup adds $15, so it sells for $40. That $15 is 37.5% of the $40 price, so the gross margin is 37.5%, not 60%. To keep a 50% gross margin, the markup has to be 100%, which prices the product at $50.
What this result leaves out
Only the product cost entered is counted. Shipping, packaging, payment and marketplace fees, discounts, returns, ad spend and tax are not included.
Before you use the result
What is the difference between markup and margin?
Markup is profit as a share of cost. Margin is profit as a share of the selling price. A product that costs $25 and sells for $40 makes $15: a 60% markup but a 37.5% margin. The same profit always gives a lower margin than markup.
How do you calculate markup?
Subtract cost from the selling price, divide by cost and multiply by 100. A product that costs $25 and sells for $40 has a markup of $15 divided by $25, or 60%. To set a price from a markup, multiply the cost by one plus the markup: $25 times 1.6 is $40.
What markup do I need for a 50% margin?
A 100% markup, which doubles the cost. To convert any target margin, divide the margin by one minus the margin: 0.5 divided by 0.5 is 1, or 100%. A 40% margin needs a 66.7% markup, and a 60% margin needs a 150% markup.
Which costs should go into the product cost?
Include every cost of getting a unit ready to sell, such as the supplier price, inbound freight, duty and packaging. Costs paid on each order, such as shipping to the customer and payment fees, come out of the margin, so leave room for them when you choose a markup.
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