Markup Calculator (cost to sell price + margin)

Markup vs margin — they're different

Markup is the increase from cost to sell price, expressed as a percent of cost. Sell price = cost × (1 + markup/100). A 50% markup on a $10 cost gives $15 sell price.

Margin is the profit as a percent of sell price. Margin = profit / sell price × 100. The same $10 cost / $15 sell price has a 33.3% margin (5/15), not 50%. Confusing the two is the most common pricing mistake — usually in the direction of underpricing.

Industry markup norms

Restaurants: food cost markup of 200-300% (3-4× cost) is standard. The high markup covers labor, rent, and waste, not pure profit.

Retail apparel: 100-150% markup (2-2.5× cost) at full price; sales slash margins.

Grocery: 5-25% markup is typical, much thinner than other retail. Volume makes it work.

Software / digital goods: highly variable — markup can be infinite when cost-to-deliver is near zero. Pricing is set by perceived value, not cost-plus.

When to think margin, when markup

Use markup when setting a price from cost: 'I bought it for $X, charging $Y'. Easy to compute, easy to apply across SKUs.

Use margin when reporting profitability: 'we earn $X per $100 of revenue'. Margin is what shareholders, accountants, and analysts focus on.

Same number, two views. If you only remember one rule: a 50% markup ≠ 50% margin. The calculator shows both so you can switch perspective without re-doing the math.