What is Product Markup?
Product markup is the amount you add to your cost price to determine the selling price. It's expressed as a percentage of the cost. For example, a 50% markup on a $50 item means you sell it for $75. Markup is different from margin — markup is based on cost, while margin is based on revenue.
How to Calculate Markup Percentage
Follow these steps to calculate your markup:
- Enter your Cost Price ($) — what you pay to acquire or produce the product
- Enter your Target Markup (%) — the percentage you want to add on top of cost
- Results show selling price, profit amount, and margin percentage instantly
Markup vs Margin: What's the Difference?
Many people confuse markup and margin, but they measure different things:
- Markup = (Selling Price - Cost) ÷ Cost × 100%
- Margin = (Selling Price - Cost) ÷ Selling Price × 100%
A 50% markup on a $50 cost = $75 selling price (33.3% margin). A 100% markup = 50% margin. The higher the markup, the larger the gap between markup and margin percentages.
Common Markup Percentages by Industry
Industry benchmarks for markups vary widely:
- Restaurants: 200-400% (food cost is typically 25-35% of selling price)
- Retail clothing: 50-100%
- Electronics: 5-15% (thin margins, high volume)
- Jewelry: 100-200%
- Services: 100-300%
- Furniture: 50-100%
Real-World Example
Example: You buy wholesale t-shirts for $10 each and want a 100% markup:
Cost Price: $10.00
Markup: 100% = $10.00
Selling Price: $10 + $10 = $20.00
Profit: $10.00
Margin: $10 ÷ $20 = 50%