Calculate a retail selling price from markup
Choose the forward calculation to enter an item cost and desired markup percentage. Choose the reverse calculation when you already know the cost and selling price and want to find the percentage added to cost. Keep both amounts on the same currency and tax basis.
Markup formula and retail example
For a forward calculation, multiply cost by the markup percentage and add that amount to cost. An item costing 80 with a 25% markup has a markup amount of 20 and a calculated selling price of 100.
For reverse markup, subtract cost from selling price, divide the difference by cost, and multiply by 100. If the same item already sells for 100, its markup on the 80 cost is 25%.
Markup is not the same as profit margin
Markup uses cost as its starting point. Margin divides profit by selling price. In the example above, 25% markup produces a 20% margin. Compare both results with the profit margin calculator before approving a product price.
Upcharge, reverse markup and edge cases
An upcharge is commonly described as an amount or percentage added to a starting cost; use the forward calculation when that is the question you need to answer. Use reverse markup to check the percentage already built into a price. A cost of zero has no defined markup percentage. A negative markup represents a selling price below the entered cost.
Worked markup examples
- Standard markup: cost 500 with 30% markup adds 150 and gives a calculated selling price of 650.
- Reverse markup: cost 500 and selling price 625 contain markup of 125, or 25% of cost.
- Price reduction: if an item costing 500 is sold for 450, the reverse result is -10%. That describes a price below the entered cost before other expenses.
Check cost changes before reusing a markup
A familiar markup percentage can produce an unsuitable price when supplier cost, freight, packaging, tax basis or payment fees change. Confirm the current landed or recorded cost basis, decide which expenses are outside that figure, and compare the result with the price customers actually pay after discounts.
If you know the margin you want rather than the markup, do not enter that margin as though it were markup. Use the profit margin calculator to compare the resulting percentages, then document the approved price in the product record.
Check the full pricing decision
Confirm cost with purchase and supplier records, save approved selling prices in product records, and use the discount calculator before testing a reduced price. Markup alone does not include operating expenses, fees, returns, discounts or tax treatment and does not guarantee that a product will be profitable.
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Markup questions this calculator answers
How do I add a percentage markup to cost?
Multiply cost by the markup percentage, then add the markup amount to cost. Use the forward calculation above to complete both steps.
How do I find the markup already in a selling price?
Use reverse markup: subtract cost from selling price, divide by cost and multiply by 100. This measures the increase from cost, not profit as a percentage of selling price.
What is an upcharge?
Upcharge commonly means an amount or percentage added to a starting cost. When the question is about the percentage added to cost, use the forward markup calculation. Confirm which costs and fees are included before relying on the result.