How to use this markup calculator
Enter values from the same reporting period and use consistent definitions. Then select Calculate. The tool performs the calculation locally in your browser and shows the result immediately.
Formula
Example
A product that costs $40 and sells for $100 has $60 gross profit before other costs and a 150% markup on cost.
What this metric tells you
Markup is a pricing metric. It shows how much the selling price exceeds the underlying product cost, but it should not be confused with gross margin.
How to interpret the result
- Markup is based on cost, while margin is based on selling price.
- Shipping, fees, returns and advertising can materially reduce the amount left after gross product profit.
- Use landed cost rather than factory cost when inbound freight and duties are meaningful.
Frequently asked questions
Is 100% markup a 100% margin?
No. A 100% markup means the selling price is twice the cost, which corresponds to a 50% gross margin before other costs.
Should I include shipping in cost?
If shipping is part of landed product cost, include it. Customer fulfillment shipping can also be modeled separately depending on your pricing method.
Can markup be negative?
Yes, if you sell below product cost.