What is the difference between markup and margin?

Markup is the percentage you add to cost to get the selling price. Margin is profit as a percentage of the selling price. A 50% markup on a $10 cost gives a $15 selling price and a 33.3% margin. A 50% margin on a $15 selling price means $7.50 profit, which is a 100% markup on the $7.50 cost. Use markup for pricing and margin for profitability analysis.

What is a good markup percentage?

A good markup depends on your industry, operating expenses, and competitive environment. Grocery stores use 10% to 30% markup. Apparel uses 100% to 150%. Jewelry can exceed 200%. Your markup needs to cover operating expenses and deliver target profit. If your operating expenses are 25% of revenue, you need at least a 33% margin, which requires a 50% markup.

How do I calculate markup from margin?

To convert margin to markup, use this formula: Markup = Margin ÷ (1 − Margin). For example, if you want a 40% margin, the required markup is 0.40 ÷ (1 − 0.40) = 0.40 ÷ 0.60 = 66.7%. A 66.7% markup delivers a 40% margin.

Should I use the same markup for all products?

Not necessarily. High-volume low-cost items can work on lower markup because operating cost per unit is low. High-ticket items may need higher markup to cover handling, longer sales cycles, and higher return risk. Many stores use category-based markup, with higher percentages for slow movers and lower percentages for fast movers.

How do operating expenses affect markup?

Operating expenses set your minimum markup. If rent, labor, and overhead equal 30% of revenue, you need at least a 43% margin to break even, which requires a 75% markup. Any markup below that loses money. Track your actual operating expense percentage and build it into your pricing formula.

When should I lower my markup?

Lower markup when competition forces price cuts, when you need to clear slow-moving inventory, or when volume gains from a lower price offset the margin loss. Run the numbers first. A 10% price cut that increases volume by 5% usually reduces total profit. But a 10% cut that doubles volume can increase total profit even with lower margin per unit.

Wholesale Markup Calculator

Price cost, wholesale, and retail from any starting point. See markup vs margin at each tier and how keystone doubling stacks up.

100% client-side. Your pricing inputs never leave this browser.

Build cost → wholesale → retail from any starting price. Markup and margin are both shown at each tier.

Country / region

Solve from

Unit costWholesale priceRetail price

Unit cost

$10.00

Wholesale

$20.00

Markup: 100.0%

Margin: 50.0%

Keystone pricing

Retail

$40.00

Markup: 100.0%

Margin: 50.0%

Keystone pricing

Unit cost

$10.00

Wholesale price

$20.00

Retail price

$40.00

Wholesale margin

50.0%

Keystone pricing (2x cost = wholesale, 2x wholesale = retail) is a common wholesale-retail chain rule of thumb.

Retail price breakdown

$0$40.00 retail

Unit cost$10.00
Wholesale profit$10.00
Retail profit$20.00

Unit cost (COGS)

Manufacturing or landed cost per unit.

Wholesale markup (%)

On cost. Keystone = 100% (2x cost).

Retail markup (%)

On wholesale. Keystone = 100% (2x wholesale).

How does the Wholesale Markup Calculator work step by step?

The pricing chain runs Cost → Wholesale Price → Retail Price, and you can enter values at any step. Markup percent calculates the selling price relative to the cost: Markup% = (selling price − cost) ÷ cost × 100. Margin percent calculates the selling price relative to the revenue: Margin% = (selling price − cost) ÷ selling price × 100. Both are shown at each level so you can see the difference clearly. A common point of confusion: a 100% markup (doubling the cost) produces only a 50% margin. Keystone pricing — the retail default in many industries — applies 100% markup at both the wholesale and retail steps, resulting in the retailer buying at 50% of MSRP. The stacked bar chart breaks each selling price into its cost, wholesale profit, and retail profit layers. Key assumption: the tool models a single-unit transaction without volume discounts or tiered pricing. Edge case: if you enter a retail price and target margins that require a wholesale price lower than the unit cost, the tool shows a negative cost margin, flagging that the pricing structure is not viable.

What does a typical Wholesale Markup Calculator result look like?

At $10 unit cost with 100% wholesale markup and 100% retail markup, wholesale lands at $20 and retail at $40. That is keystone pricing: 50% margin at each selling step. Starting from a $40 MSRP with 50% retail and wholesale margins backs into $20 wholesale and $10 cost.

Frequently asked questions

What is the difference between markup and margin?
Markup is the percentage you add to cost to get the selling price. Margin is profit as a percentage of the selling price. A 50% markup on a $10 cost gives a $15 selling price and a 33.3% margin. A 50% margin on a $15 selling price means $7.50 profit, which is a 100% markup on the $7.50 cost. Use markup for pricing and margin for profitability analysis.
What is a good markup percentage?
A good markup depends on your industry, operating expenses, and competitive environment. Grocery stores use 10% to 30% markup. Apparel uses 100% to 150%. Jewelry can exceed 200%. Your markup needs to cover operating expenses and deliver target profit. If your operating expenses are 25% of revenue, you need at least a 33% margin, which requires a 50% markup.
How do I calculate markup from margin?
To convert margin to markup, use this formula: Markup = Margin ÷ (1 − Margin). For example, if you want a 40% margin, the required markup is 0.40 ÷ (1 − 0.40) = 0.40 ÷ 0.60 = 66.7%. A 66.7% markup delivers a 40% margin.
Should I use the same markup for all products?
Not necessarily. High-volume low-cost items can work on lower markup because operating cost per unit is low. High-ticket items may need higher markup to cover handling, longer sales cycles, and higher return risk. Many stores use category-based markup, with higher percentages for slow movers and lower percentages for fast movers.
How do operating expenses affect markup?
Operating expenses set your minimum markup. If rent, labor, and overhead equal 30% of revenue, you need at least a 43% margin to break even, which requires a 75% markup. Any markup below that loses money. Track your actual operating expense percentage and build it into your pricing formula.
When should I lower my markup?
Lower markup when competition forces price cuts, when you need to clear slow-moving inventory, or when volume gains from a lower price offset the margin loss. Run the numbers first. A 10% price cut that increases volume by 5% usually reduces total profit. But a 10% cut that doubles volume can increase total profit even with lower margin per unit.