How to use this calculator
- Choose what to solve for:
- Selling price: you know your unit cost and the markup you want.
- Max cost: you know the retail price (or the manufacturer’s suggested price) and your target markup, and want the most you can pay per unit.
- Markup %: you know both cost and price and want the markup.
- Enter the unit cost. Use your landed cost: the wholesale price plus inbound freight, duties and packaging.
- Pick a price ending if you want the result rounded up to a .99, .95 or whole-dollar price point.
- Open Order totals and enter a quantity to see revenue and gross profit for a whole order or shipment.
The table under the result shows the selling price, profit and margin for your cost at common markups, from 10% to 200%.
The markup formula
Markup is the profit expressed as a share of what the item cost you:
To set a price, multiply the cost by the markup multiplier, 1 plus the markup as a decimal:
Example: a product costs $25 and you use a 60% markup. The multiplier is 1.6, so the price is $25 × 1.6 = $40.00. You make $15 per unit, which is a 37.5% gross margin.
Markup to margin and price
Here is what common markups mean for a $25 unit cost:
| Markup | Selling price | Profit per unit | Gross margin |
|---|---|---|---|
| 10% | $27.50 | $2.50 | 9.09% |
| 25% | $31.25 | $6.25 | 20% |
| 30% | $32.50 | $7.50 | 23.08% |
| 50% | $37.50 | $12.50 | 33.33% |
| 60% | $40.00 | $15.00 | 37.5% |
| 75% | $43.75 | $18.75 | 42.86% |
| 100% (keystone) | $50.00 | $25.00 | 50% |
| 150% | $62.50 | $37.50 | 60% |
| 200% | $75.00 | $50.00 | 66.67% |
Margin is always lower than markup because it’s measured against the larger number, the price. If your accounting reports gross margin, use the margin calculator to set prices from a target margin directly.
Keystone and wholesale pricing
Keystone pricing, a 100% markup, doubles the cost: a $18.50 item retails at $37.00 and earns a 50% margin. It’s an easy rule of thumb, but it isn’t sacred. Fast-moving commodity items often carry far less, and slow-moving or fragile goods often need more to cover the inventory you’ll carry and the markdowns you’ll take.
Markups also stack along the supply chain. Suppose a manufacturer sells an item to a wholesaler for $10. The wholesaler adds 30% and sells it to a store for $13. The store uses keystone pricing and puts it on the shelf at $26. The final price is a 160% markup on the manufacturer’s price, even though no single business added more than 100%.
That’s why the Max cost mode is useful when buying: if a brand sets a $40 suggested retail price and you need a 60% markup to cover your costs, you can’t pay more than $25 a unit. Anything above that squeezes your margin.
Retail price endings
Prices ending in .99 or .95 are a long-standing retail convention. The calculator always rounds up to the next price point so rounding never cuts into the markup you chose. For a $18.50 cost and a 60% markup:
| Price ending | Selling price | Actual markup |
|---|---|---|
| Exact | $29.60 | 60% |
| .95 | $29.95 | 61.89% |
| .99 | $29.99 | 62.11% |
| Whole dollar | $30.00 | 62.16% |
On an order of 48 units at $29.99, your revenue is about $1,440 against $888 of cost, for $552 of gross profit.
Pricing tips
- Use landed cost, not invoice cost. Freight, duties, card fees and packaging can add several percent to every unit, and markup on an understated cost understates your price.
- Leave room for discounts. A 25% off sale on a keystone-priced item cuts your margin from 50% to 33.33%. Check sale prices with the discount calculator.
- Price before sales tax. Sales tax is added at the register and passed to the state; it isn’t part of your markup. The sales tax calculator shows the customer’s total.
- Be careful with “compare at” prices. The FTC’s Guides Against Deceptive Pricing say advertising a manufacturer’s suggested price as a reference can mislead if items aren’t actually sold at that price in your area.
- Review markups by category. One markup across the whole store hides which products really pay the rent.
Assumptions and limitations
The calculator uses one unit cost and one price. It doesn’t account for volume discounts, returns, shrinkage, payment-processing fees or sales tax unless you build them into the cost. Rounded prices are always rounded up; if you prefer to round down, enter the rounded price in Markup % mode to see the result.
Sources
- eCFR: 16 CFR Part 233, FTC Guides Against Deceptive Pricing
- U.S. Small Business Administration: Manage your finances
This calculator is for planning and education, not accounting or legal advice.
Frequently asked questions
How do I calculate markup?
Subtract the cost from the selling price, divide by the cost and multiply by 100. An item that costs $25 and sells for $40 has a $15 profit, and $15 ÷ $25 = 60% markup. To go the other way, multiply the cost by 1 plus the markup as a decimal, so $25 × 1.6 = $40.
What is keystone pricing?
Keystone pricing means a 100% markup, so the retail price is double the wholesale cost. A $18.50 item becomes $37.00. It gives a 50% gross margin, which is why it became a common starting point in retail.
Is markup the same as margin?
No. Markup is profit divided by cost; margin is profit divided by the selling price. The same $15 profit on a $25 item sold at $40 is a 60% markup but only a 37.5% margin. Mixing them up is the most common pricing error.
What markup should a retailer use?
There's no single right markup. It has to cover your overhead, discounts, shrinkage and profit, and stay competitive with other sellers. Work out the gross margin you need first, then convert it with markup = margin ÷ (1 − margin).
How do I find the most I can pay a supplier?
Divide the retail price by 1 plus your target markup. If the shelf price is $40 and you need a 60% markup, you can pay up to $40 ÷ 1.6 = $25 per unit. Choose "Max cost" in the calculator to do this automatically.
Does rounding to $.99 change my markup?
Yes, slightly upward, because the calculator always rounds up to the next price point. A 60% markup on $18.50 gives $29.60; rounding to $29.99 lifts the actual markup to 62.11%.
Updated November 2026. Results are estimates for educational purposes and depend on the inputs you provide.