How is the result calculated?
Retail pricing: cost 175, price 250
A product costs you $175 and you sell it at $250. The markup amount is 250 − 175 = $75. Markup percentage divides that by cost: 75 / 175 ≈ 42.9%. The implied margin is 75 / 250 = 30%. The same profit looks bigger as markup than as margin — knowing which number you are quoting matters in pricing conversations and contracts.
Example input and output | Input | Value |
| price | 250.00 |
| cost | 175.00 |
| Result | Markup amount $75.00 · markup 42.9% · implied margin 30.0% |
What is the formula and its assumptions?
Markup amount
markup amount = price − cost
Formula terms | Symbol | Meaning |
price | selling price of the product or service |
cost | what the product or service costs you |
Markup percentage
markup % = (price − cost) / cost × 100
Formula terms | Symbol | Meaning |
price − cost | markup amount |
cost | your cost base |
Markup is relative to cost, so it can exceed 100%. A 50% markup means profit is half of your cost, not half of the price.
Selling price from a target markup
price = cost × (1 + markup% / 100)
Formula terms | Symbol | Meaning |
cost | your cost base |
markup% | target markup percentage |
What are the most common mistakes?
- Quoting margin as markup (or vice versa) in a pricing conversation — the numbers differ whenever profit is positive.
- Applying markup to the selling price instead of the cost, which silently reduces your profit.
- Ignoring payment-processing fees or channel commissions when setting a target markup; the markup that covers cost alone may not cover the full cost of the sale.
What are the assumptions and limitations?
- Markup covers the product cost only — it does not account for overhead, shipping, or channel fees unless you include them in the cost figure.
- Results are estimates for pricing decisions, not professional financial advice.
- The calculator assumes a single cost per unit; volume discounts or tiered costs need a more detailed model.
Where do the numbers come from?
Last reviewed August 4, 2026 · Version 1.0.0 · Toolivaro does not guarantee external content.
Frequently asked questions
What is the difference between markup and margin?
Markup is profit expressed as a percentage of cost; margin is profit expressed as a percentage of the selling price. For a $250 product that costs $175, markup is 42.9% but margin is 30%. They are only equal when profit is zero.
Can markup be more than 100%?
Yes. Because markup divides profit by cost, a product costing $10 and selling for $30 has a 200% markup. Margin on the same sale is 66.7%.
Why does the calculator show margin when I asked for markup?
Because the two are so often confused, the calculator shows both for the same price and cost. If a supplier or a contract quotes one, you can convert with the other number on this page.
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