How it works
Markup is how much you add on top of cost to set a price, expressed as a percentage of cost. It is the number most retailers, contractors and wholesalers use when building prices.
Because markup is measured against cost and margin against price, the markup percentage is always larger than the margin percentage for the same item. A 100% markup ("keystone" pricing in retail) gives a 50% margin.
Switch to "Cost and markup" to work forward from a target markup to a selling price.
Formula
Markup = (Price − Cost) ÷ Cost × 100. Price = Cost × (1 + Markup ÷ 100).
Questions people ask
What is keystone pricing?
Keystone pricing means doubling the wholesale cost, which is a 100% markup and a 50% gross margin. It is a common starting point in retail.
Why is my markup higher than my margin?
Markup divides profit by cost, margin divides the same profit by price. Price is always larger than cost when you make a profit, so margin is always the smaller percentage.
Should cost include shipping and overhead?
Include every cost you pay to get the item ready to sell, such as freight in and packaging. General overhead like rent is usually covered by choosing a markup large enough, rather than added to unit cost.