Determine the optimal selling price for your products based on cost and desired markup percentage.
One of the most common reasons small businesses fail is improper pricing. If you don't charge enough, you can't cover your overhead or pay yourself. The Markup Calculator helps you establish a selling price that ensures profitability by adding a percentage-based markup to your production costs.
Markup is a straightforward way to ensure every sale contributes to your bottom line. It is calculated as a percentage of the cost.
If it costs you $10 to make a pizza and you want a 200% markup, you add $20 to the cost ($10 × 2), resulting in a selling price of $30.
A classic retail standard where the markup is 100%. Essentially, you double the cost. Buy for $25, sell for $50. It's simple and often covers typical retail overhead.
You calculate all costs (materials, labor, overhead) and add a fixed percentage (e.g., 20%). This guarantees a profit but ignores what customers are willing to pay.
Setting the price based on the perceived value to the customer rather than the cost. A designer handbag might cost $50 to make but sell for $2,000 due to brand value. This offers the highest potential markup.
Remember: Markup is what you add to the cost. Margin is what you keep from the price.
A 50% Markup is NOT a 50% Margin.
Cost: $100. Markup: 50%. Price: $150.
Profit: $50.
Margin: $50 / $150 = 33.3%.
It depends on volume and overhead. Grocery stores have low markups (15-20%) but high volume. Jewelry stores have high markups (100-300%) but low volume.
No. Markup calculations are pre-tax. Sales tax is collected from the customer on top of the final selling price.