The markup formula
Selling Price = Cost × (1 + Markup%) Example: Cost $30, 40% markup Selling Price = $30 × 1.40 = $42.00 Markup is calculated on cost, not on the selling price — a 40% markup means adding 40% of the cost on top of what you paid, not that 40% of the final price is profit. That distinction is exactly where margin and markup get confused: a 40% markup on a $30 cost gives a $42 selling price, but that $12 of profit is only 28.6% of the $42 selling price — a 28.6% margin, not 40%.
Markup reference table
| Markup | Equivalent Margin | On $100 Cost | Selling Price |
|---|---|---|---|
| 10% | 9.1% | $100 | $110.00 |
| 20% | 16.7% | $100 | $120.00 |
| 25% | 20.0% | $100 | $125.00 |
| 33.3% | 25.0% | $100 | $133.33 |
| 50% | 33.3% | $100 | $150.00 |
| 66.7% | 40.0% | $100 | $166.67 |
| 100% | 50.0% | $100 | $200.00 |
| 200% | 66.7% | $100 | $300.00 |
Frequently asked questions
What's the difference between markup and margin?
Markup is profit divided by cost; margin is profit divided by selling price. They describe the same dollar amount of profit from two different vantage points, which is why a 40% markup and a 40% margin are never the same selling price — markup is always a smaller percentage than margin's equivalent number would suggest, and vice versa.
How do I calculate selling price from cost and markup percentage?
Multiply the cost by 1 plus the markup percentage as a decimal. A $50 cost with a 25% markup is $50 × 1.25 = $62.50.
What markup percentage should I use?
It depends heavily on the industry, your overhead costs, and competitive pricing. Retail markups commonly range from 30–100%+ depending on the product category; wholesale and B2B markups are often thinner. There's no universal correct number.