Use this markup calculator to calculate your sale price and how much revenue and profit you will earn with different markup percentages.
To use the calculator, enter the cost of the item you are selling as well as the markup to find the revenue (sales price) and profit.
If you know the cost and sales price and want to find the markup, just enter the two values in the Cost and Revenue boxes and the calculator will update to show you your markup percentage and gross profit.
By switching the Advanced Mode toggle on, you can also see your gross profit margin. This is the ratio of profit to revenue (selling price).
Markup Calculation Formula
The formula for calculating markup is as follows:
Markup = 100 * Profit / Cost
The number is multiplied by 100 in order to present markup as a percentage.
Here is a step-by-step method for determining your markup:
- Find your cost of goods sold (COGS). This is the amount it costs you to buy an item.
- Work out your gross profit. This is the sales price minus the cost of goods sold. For example, if you buy an item for $10 and sell it for $15, your gross profit is $15 – $10 = $5
- Divide gross profit by COGS. In our example above, this would be $5 / $10 = 0.5
- Multiple the number by 100 to express it as a percentage. For example, 0.5 * 100 = 50%
In the example above, the sales price of $15 is 50% more than the cost of goods sold of $10, hence the markup is 50%.
Markup vs. Margin
Markup and margin are easily confused. They are not the same thing, and confusing them can lead to costly mistakes.
Markup is the percentage difference between the sales price and the cost of goods sold. For example, if you buy a product for $10 and sell it for $15, the markup is 50% because if you increase $10 by 50% you get $15 ($10 + $5).
Margin is the percentage of the final sales price that was profit. In our example, the seller makes a profit of $5, which is 33.33% of the final sales price of $15.
If you want a specialized tool for calculating margin, see our margin calculator.
How Do You Calculate a 20% Markup?
To calculate a 20% markup, take your cost of goods sold, and multiply it by 0.2 to get the markup. For example, if you pay the supplier $15 for a product and you want to add a 20% markup, your markup amount is $15 * 0.2 = $3. Your final sales price would be the cost of goods sold plus the markup, or $15 + $3 = $18.
You can also use our calculator tool above and enter 20% in the Markup box, then add your cost of goods sold in the Cost box. It will show you your final sales price in the Revenue box.
How to Calculate Cost Price from Selling Price and Markup
Cost price, or the cost of goods sold (COGS) can be easily calculated if you know the selling price and markup percentage.
The formula for calculating cost price from the selling price and markup percentage is as follows:
Cost price = Selling Price / (1 + (Markup/100))
Here is a step-by-step method with an example.
- Imagine your selling price is $25 and your markup is 50%. First, divide the markup by 100 to represent it as a decimal: 50/100 = 0.5.
- Then add this to 1: 1+0.5 = 1.5
- Now, divide the selling price by this number: $25/1.5 = $16.67
You can also calculate the cost price from the selling price and margin using our markup calculator tool by entering the selling price in the Revenue box and the margin percentage in the Margin box.
No, markup and margin are not the same thing. Markup is the percentage difference between the sales price and the cost of goods sold, whereas margin is the percentage of the final sales price that was profit.
In pure dollar terms, markup is the same as gross profit, but when as expressed as a percentage markup and profit are not the same thing. For example, if your cost of goods sold is $10 and your sales price is $12, your markup and gross profit are both $2 when expressed in dollars. However, when expressed as a percentage the markup Is 20%, whereas the gross profit margin is 16.67%.