Markup Calculator

When markup pricing works well

Markup is the quickest way to price when you stock many items or resell materials. Instead of judging every product separately, you apply a consistent percentage to each cost, and prices follow automatically when a supplier invoice changes.

Trades often use it for parts and materials on a job, and retailers use it by product category. The weakness is that it looks only at your cost. It says nothing about what customers will pay or what a competitor charges, so treat the output as a starting price to sanity-check.

The formulas

Selling price

Selling price = Cost × (1 + Markup % ÷ 100)

Resulting margin

Margin % = (Selling price − Cost) ÷ Selling price × 100

Worked example

A contractor pays $120 for a fixture and applies a 35% markup to materials.

1. Price: $120 × 1.35 = $162.00.
2. Profit: $162 − $120 = $42.00.
3. Margin: $42 ÷ $162 = 25.93%.

A 35% markup leaves a margin of just under 26%, well short of 35%.

Checking that a markup is enough

Take your overhead as a percentage of sales, then add the profit you want. If overhead runs at 20% of sales and you want 10% profit, you need a 30% margin, which is roughly a 43% markup, not 30%. Pricing at a 30% markup in that situation yields only a 23% margin, and the shortfall is easy to miss. The overhead rate calculator can supply that overhead figure.