Markup Calculator
Calculate your markup percentage or selling price with this simple calculator. Perfect for pricing your products or services.
Use this if you want the markup %
Enter your cost price and your sale price
Use this if you'd like to use the markup to set prices
Enter your cost price and the markup percentage you want to get your sale price
Understanding Markup vs Margin
What is markup?
Markup is the amount added to the cost price of goods to cover overhead and profit. It's expressed as a percentage of the cost price. For example, if a product costs R100 and you sell it for R150, the markup is 50%. Markup is calculated as: ((Sale Price - Cost Price) / Cost Price) × 100.
How is markup different from margin?
While markup is calculated as a percentage of the cost price, margin is calculated as a percentage of the selling price. Using the same example, a product that costs R100 and sells for R150 has a markup of 50% but a margin of 33.33%. Margin is calculated as: ((Sale Price - Cost Price) / Sale Price) × 100.
When to use markup?
Markup is particularly useful when pricing products in retail environments. It helps businesses ensure that each product contributes adequately to covering overhead costs and generating profit. Markup is often used in industries where costs are clearly defined and businesses want to apply a consistent pricing approach across multiple products.
Markup Percentage Guide
| Markup (%) | Equivalent Margin (%) | Example (Cost: R100) |
|---|---|---|
| 10% | 9.09% | Sale price: R110 |
| 25% | 20% | Sale price: R125 |
| 50% | 33.33% | Sale price: R150 |
| 100% | 50% | Sale price: R200 |
| 200% | 66.67% | Sale price: R300 |
As you can see from the table above, markup and margin are related but different metrics. A 100% markup equates to a 50% margin, while a 50% markup equates to a 33.33% margin.
The relationship between markup and margin can be expressed with these formulas:
To convert markup to margin:
Margin = Markup / (1 + Markup)
To convert margin to markup:
Markup = Margin / (1 - Margin)
Typical Industry Markup Guidelines
Markup percentages vary widely across different industries. Here are some typical ranges:
Retail
General retail: 30-50% markup
Luxury goods: 100-500% markup
Grocery stores: 15-25% markup
Restaurants
Food items: 60-300% markup
Alcoholic beverages: 200-400% markup
Soft drinks: 300-600% markup
Services
Professional services: 100-500% markup (on direct labor costs)
Repair services: 50-100% markup
Construction
Building materials: 15-20% markup
Contractor work: 10-30% markup
These are just guidelines, and your specific business situation may require different markup percentages. Factors to consider include competition, overhead costs, market positioning, and customer price sensitivity.
Need help with pricing strategy?
Accounter can help you develop a pricing strategy that maximizes profit while keeping your products competitive in the market.
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*Disclaimer
Accounter does not provide accounting, tax, business or legal advice. This calculator has been provided for information purposes only. You should consult your own professional advisors for advice directly relating to your business.