Example 1, Candles, $18 wholesale cost at 150% markup
$45.00- Find the markup amount 18 × 1.50 = $27.00
- Add to the cost 18 + 27.00 = $45.00
A candle costing $18 wholesale, marked up 150%, sells for $45.00.
Markup Calculator
Markup Amount
27.00
Selling Price
45.00
A 150.00% markup on a cost of 18.00 adds 27.00, for a selling price of 45.00.
Formula
Selling Price = Cost × (1 + Markup % ÷ 100)
Markup is the amount added to a product's cost to set its selling price, expressed as a percentage of that cost. It's the pricing-specific counterpart to a general percentage increase, always measured from cost upward.
Retailers, wholesalers, and service providers all set a target markup as their primary pricing lever, high enough to cover overhead and profit, low enough to remain competitive. Choosing the right markup percentage is one of the first pricing decisions any product-based business makes.
Markup Formula
Formula
Selling Price = Cost × (1 + Markup % ÷ 100)
The markup amount itself is Cost × (Markup % ÷ 100), the selling price is the cost plus that amount, using the same (1 + rate ÷ 100) multiplier shape as every increase calculation on this site.
How to Calculate Markup
- Multiply the cost by the markup percentage
- Add the markup amount to the cost
- Check the resulting margin if needed
Working backward, a target selling price can also drive the markup decision: decide what you want to charge, subtract the cost, and divide by the cost to see what markup percentage that price implies, useful when a competitor's price sets the ceiling before you know your own margin.
Markup Examples
Example 2, Phone cases, $6.40 wholesale cost at 220% markup
$20.48- Find the markup amount 6.40 × 2.20 = $14.08
- Add to the cost 6.40 + 14.08 = $20.48
A phone case costing $6.40 wholesale, marked up 220%, retails at $20.48, a common markup range for small accessories.
Relationship to Percentage Decrease
Markup is the inverse-direction relative of percentage decrease, the same mechanics, applied going up from a cost rather than down from an original value. Where a decrease calculation multiplies by (1 − rate ÷ 100), markup multiplies by (1 + rate ÷ 100); flip the sign inside the parentheses and you have the other calculation. A markup that's later discounted back down, dollar for dollar, doesn't return to the original cost either, the same asymmetry that runs throughout this entire site.
Where Markup Shows Up
Wholesale-to-Retail Pricing
Retailers apply a target markup percentage to a wholesaler's cost to set a shelf price that covers overhead and profit.
Restaurant Menu Pricing
Menu prices are often set using a target markup over ingredient cost, adjusted for labor and overhead specific to each dish.
Service Industry Labor Markup
Contractors and agencies frequently mark up an hourly labor cost by a fixed percentage to arrive at a client-facing billing rate.
Across all three, the same tension applies: too little markup and the business doesn't cover its overhead; too much and customers look elsewhere. Most industries converge on a workable range through competition and experience rather than a single formula-derived number.
Frequently Asked Questions
Questions that come up most often once the basic markup calculation is understood, especially around how it relates to margin and to the cost side of a pricing decision.
What's a typical markup percentage in retail?
It varies enormously by category, grocery markups often run under 20%, while apparel and jewelry frequently run well over 100%. There's no single "normal" figure across industries.
How is markup different from margin?
Markup is calculated on cost; margin is calculated on the selling price, the same dollar amount of profit produces a larger markup percentage than margin percentage. See the profit margin calculator for the margin-side version.
How do I calculate the cost if I know the selling price and the markup percentage?
Divide the selling price by (1 + markup ÷ 100). A selling price of $45 at a 150% markup implies a cost of 45 ÷ 2.50 = $18.
Can markup exceed 100%?
Yes, routinely, a 100% markup simply means the selling price is double the cost, and many product categories, especially where packaging or brand value dominates the price, run well beyond that.
Why do wholesalers and retailers sometimes use different markup conventions?
Wholesalers often quote markup on cost since that's what they control; retailers frequently think in margin because that's what determines their profitability against revenue targets. Both describe the same sale from different reference points.
How do I convert a markup percentage to a margin percentage?
Margin % = Markup % ÷ (100 + Markup %) × 100. A 100% markup converts to a 50% margin, and a 50% markup converts to a 33.33% margin, they're never equal except at 0%.
Is markup the same as profit?
Markup is the added amount before other costs, shipping, labor, overhead, are subtracted. Profit is usually what's left after all costs are accounted for, so a healthy markup doesn't guarantee a healthy profit.
How do I calculate markup for a bundle of products with different costs?
Sum the individual costs, decide on a single markup percentage or a target bundle price, then apply the same formula to the combined cost, bundling doesn't change the underlying calculation, only what counts as "the cost."
What is keystone pricing?
Keystone pricing is a flat 100% markup, doubling the wholesale cost to set the retail price, historically common in apparel and still used as a quick starting point in several retail categories.
Can markup be negative?
Only if a business deliberately sells below cost, a negative markup means the selling price is lower than what the item cost, which happens with loss-leader pricing or clearance stock but isn't the normal case this calculator assumes.