Markup Percentage Calculator

What markup percentage tells you

Markup percentage is the amount added to cost, expressed as a fraction of that cost. If an item costs 50 and sells for 75, the markup is 25 on a 50 base — a 50% markup. This is the most intuitive framing for pricing decisions in a cost-driven business. The seller knows the cost, sets the amount added, and the markup percentage captures that relationship in a single number.

How the math works

Markup% = (Selling Price − Cost) ÷ Cost × 100. The gross profit is Selling Price − Cost, and the markup percentage expresses that profit relative to cost. The same profit can also be expressed relative to price, which gives the margin percentage. Markup and margin describe the same dollars with different denominators — a 50% markup is a 33.3% margin, a 100% markup is a 50% margin, a 200% markup is a 66.7% margin.

Industry benchmarks

Typical markup ranges vary sharply by industry. Grocery retail runs 15-25% markup on most items with loss-leaders well below that. Clothing retail commonly runs 100-150% markup to cover inventory risk, unsold merchandise, and seasonality. Restaurants typically mark up ingredients 300-500% to cover labour, rent, and waste. Luxury goods mark up 500-1000% or more to support brand positioning and distribution. Software businesses have near-zero COGS per unit and effectively infinite markup on the raw math, which is why they get valued differently than product businesses. Industry benchmarks provide context for comparing prices and identifying outliers in a market.

When markup alone does not tell the full story

A high markup percentage on low volume can still produce weak total profit. A small boutique with 200% markup selling 50 items a month makes less gross profit than a supermarket with 20% markup selling 50,000 items. Markup times volume is what pays the bills. Any pricing analysis that ignores volume risks optimising for the wrong variable — raising markup beyond what demand supports is a common error in small businesses learning pricing.

Markup and discounts

Discount math interacts with markup in ways that are easy to get wrong. A 50% markup product has a 33.3% margin. Discount it 25% off the selling price, and gross profit drops dramatically — the margin can become negative depending on the starting markup. As a reference point, a discount equal to the margin percentage brings gross profit to zero. Beyond that point, the selling price falls below cost. Most retailers build in a higher initial markup precisely because some inventory will end up discounted — the full-price items subsidise the marked-down ones.