Markup Calculator

Markup expresses the percentage by which an item's selling price exceeds its initial production or purchase cost. The core relationship relies on three primary variables: Cost (C), Markup Percentage (M), and Revenue or Selling Price (R). The fundamental formula states that Revenue equals Cost plus the product of Cost and Markup: Revenue = Cost + (Cost * Markup). Alternatively, you can find the monetary Profit by subtracting Cost from Revenue: Profit = Revenue - Cost. Finally, the Markup percentage itself is calculated by dividing the total Profit by the initial Cost: Markup = Profit / Cost. Understanding these three interconnected formulas allows you to solve for any missing variable as long as you have the other two pieces of data.

Imagine you run an online boutique and purchase a handmade leather bag at a wholesale cost of $50. You want to apply a healthy 40% markup to ensure you cover your operational expenses and generate a solid return. First, convert the markup percentage to a decimal: 40% becomes 0.40. Next, apply the revenue formula: Revenue = $50 + ($50 * 0.40). This breaks down to Revenue = $50 + $20, giving you a total selling price of $70. To find your exact profit, subtract the original cost from the revenue: $70 - $50 = $20. Thus, your markup yields a $20 profit per bag sold.

Always double-check whether you are calculating markup or profit margin, as using the wrong metric can severely underprice your inventory. Remember that a 100% markup means your selling price is double your cost, resulting in a 50% profit margin, not a 100% margin. Factor in indirect expenses such as shipping, packaging, and platform fees alongside your base wholesale cost before applying your desired markup percentage to ensure true profitability.