Markup Calculator
Calculate your ideal selling price from cost and markup percentage. A 100% markup is NOT a 100% margin. See the real math.
Enter Your Numbers
Your Results
Enter your numbers to see results
What is Markup?
Markup is the percentage added to the cost of a product to determine its selling price. It is the most common pricing method in ecommerce and retail, used by merchants to ensure they cover costs and generate profit on every sale.
The formula is: Markup % = (Selling Price - Cost) / Cost x 100
For example, if a t-shirt costs $12 to source and you sell it for $30, the markup is ($30 - $12) / $12 x 100 = 150%. This means you are charging 150% above your cost. The resulting profit is $18 per unit, and the profit margin is 60%.
Markup is especially useful for pricing decisions because it starts from what you know with certainty: your cost. From there, you apply a percentage to reach a selling price that meets your profitability targets.
Markup vs Margin: The Critical Difference
The most common pricing mistake in ecommerce is confusing markup with margin. They sound similar but produce very different numbers. Getting them mixed up leads to underpricing, shrinking profits, and in the worst cases, selling at a loss without realizing it.
A 100% markup = 50% margin, not 100%. This surprises many merchants. If a product costs $10 and you apply a 100% markup, the selling price is $20. But the margin is only ($20 - $10) / $20 = 50%. The markup divides by cost (smaller number), so it is always a higher percentage. The margin divides by selling price (larger number), so it is always lower.
| Markup % | Margin % | Example ($10 cost) |
|---|---|---|
| 50% | 33.3% | Sell at $15.00, profit $5.00 |
| 100% | 50.0% | Sell at $20.00, profit $10.00 |
| 150% | 60.0% | Sell at $25.00, profit $15.00 |
| 200% | 66.7% | Sell at $30.00, profit $20.00 |
| 300% | 75.0% | Sell at $40.00, profit $30.00 |
The takeaway: if you need a 50% profit margin, you need a 100% markup, not a 50% markup. If your supplier quotes a recommended 40% margin, you need a 66.7% markup. Always convert between the two before setting prices.
How to Set the Right Markup
1. Know Your True Costs
Before setting markup, calculate your complete cost per unit: manufacturing, packaging, inbound freight, duties, and any per-unit overhead. Many merchants only look at the supplier invoice and forget about landing costs, which can add substantially to the purchase price. Undercounting costs means your real markup is lower than you think.
2. Research Your Competition
Check what competitors charge for similar products. If the market price for a product is $30 and your cost is $12, that implies a 150% markup. Pricing significantly above the market requires a clear value differentiator. Pricing below leaves profit on the table. Use competitive pricing as a reference, not a ceiling.
3. Account for All Expenses
Your markup needs to cover more than COGS. Factor in platform fees (3-5%), payment processing, shipping subsidies, return costs, marketing spend, and fixed overhead. A product with a 100% markup and 50% gross margin might only deliver a thin net margin once all expenses are accounted for.
4. Consider Perceived Value
Customers do not buy based on your cost. They buy based on the value they perceive. Premium branding, superior packaging, better customer service, and exclusive features all justify higher markups. Many DTC brands successfully charge very high markup on products that could be commoditized, because they have built a brand worth paying for.
5. Test and Iterate
Pricing is not set-and-forget. Run A/B tests on pricing, analyze conversion rates at different price points, and monitor how margin changes with volume. A 10% price increase with a 5% drop in conversion still nets you more profit in most cases. Review your markup quarterly at minimum and adjust based on cost changes, competitive movements, and demand patterns.
Lifetimely by Amp tracks real markup and margins across every product and order automatically, so you always know your true profitability.
Learn more about Lifetimely