Markup Calculator
Calculate markup percentage, profit margin, and selling price. Convert between markup and margin instantly.
Markup & Margin Calculator
How Markup Pricing Works
Markup is the amount added to the cost of a product to determine its selling price. If a product costs £10 to make and you sell it for £15, your markup is £5 — or 50% of the cost.
The formula: Markup % = ((Selling Price - Cost) / Cost) x 100. It's the simplest pricing method: know your cost, apply your markup, and you have your price. This is why cost-plus pricing is the most common strategy for physical products.
The key mistake people make is confusing markup with margin. A 50% markup does NOT mean 50% of the selling price is profit. With a 50% markup, you sell a £10 item for £15 — but your margin is only 33.3% (£5 profit on £15 revenue). Use the calculator above to convert between the two instantly.
Standard Markups by Industry
| Industry / Product | Typical Markup | Equivalent Margin | On £10 Cost |
|---|---|---|---|
| Supermarket groceries | 5–25% | 5–20% | Sells for £10.50–£12.50 |
| Clothing retail | 100–300% | 50–75% | Sells for £20–£40 |
| Restaurant food | 200–400% | 67–80% | Sells for £30–£50 |
| Restaurant drinks | 300–500% | 75–83% | Sells for £40–£60 |
| Jewellery | 100–400% | 50–80% | Sells for £20–£50 |
| Electronics | 10–50% | 9–33% | Sells for £11–£15 |
| Software / digital | 500–5,000% | 83–98% | Near-zero marginal cost |
What this means for you: High markups don't always mean high profits. A restaurant marks up food 300% but spends heavily on rent, labour, and waste — net profit is typically 3–9%. Electronics retailers mark up only 20% but sell enormous volumes. The markup reflects the cost structure, not the profitability.
Pricing Strategy Beyond Simple Markup
Cost-Plus Pricing
Add a fixed markup to your cost. Simple and predictable. Works well for commodities, wholesale, and products where customers can easily compare prices. The risk: it ignores what customers are willing to pay.
Value-Based Pricing
Price based on the value to the customer, not your cost. A £2 painkiller at an airport sells for £6 because travellers value convenience. Software companies use this — the cost to serve one more user is near zero, but the value is high.
Competitive Pricing
Set prices based on what competitors charge. Common in saturated markets like electronics retail. The downside: you're in a race to the bottom. Differentiate on service, quality, or experience to avoid pure price competition.
Keystone Pricing
A specific form of cost-plus: double the wholesale cost. Markup = 100%, margin = 50%. Simple and widely used in retail. "Keystone" because 50% margin is the foundation of traditional retail profitability.
Quick Markup-to-Margin Cheat Sheet
The most common mistake: confusing markup with margin. A 50% markup means you add half the cost on top (cost £10 → sell £15). A 50% margin means half the selling price is profit (sell £20 → profit £10). The margin is always a smaller number than the markup for the same absolute profit.
Related Business Tools
How to use this tool
Choose a calculation mode
Enter two values
See markup, margin, and profit instantly
Common uses
- Converting between markup and margin for product pricing
- Calculating selling price from cost with a target markup
- Working out your actual margin from known cost and price
- Comparing profitability across different product lines
- Setting wholesale and retail pricing strategies
Share this tool