Pricing & Markup Calculator
Calculate the optimal selling price for your products based on cost and your desired markup percentage.
Understanding Pricing and Markup
Pricing your products correctly is vital for business survival. Markup is the percentage added to the cost to determine the selling price. Margin, on the other hand, is the percentage of the selling price that is profit.
Markup vs Margin
It's important not to confuse markup with margin. A 50% markup on a $100 product means you add $50, selling it for $150. However, your gross margin on that $150 sale is ($50 / $150), which is 33.3%, not 50%.
Worked Example
- Product Cost: $50
- Desired Markup: 30%
- Selling Price = $50 + ($50 × 0.30) = $65.
- Gross Profit = $15.
- Gross Margin = ($15 / $65) × 100 = 23.08%.
Frequently Asked Questions
How do I decide the right markup?
The right markup depends on your industry norms, your overhead costs, and competitor pricing. Retail clothing might see markups of 100% or more (keystone pricing), while electronics might have much lower markups.
Disclaimer: This calculator is for educational and informational purposes only. It is not a substitute for professional financial advice. Results are estimates based on the information provided and may not reflect actual outcomes. Please consult with a qualified financial advisor, accountant, or tax professional before making any financial decisions. Past performance does not guarantee future results.