What is markup?
Markup is the amount you add to cost to arrive at a selling price, expressed as a percentage of cost. If a product costs $10 and you sell it for $25, the markup is $15, or 150% of cost.
Markup is popular because it is easy to apply: "cost plus 100%" is a quick mental rule. The catch is that it is not the same as margin, which is what tells you how much of each sale you keep.
Markup formulas
| To find | Formula |
|---|---|
| Selling price | price = cost × (1 + markup) |
| Markup % | (price − cost) ÷ cost × 100 |
| Profit | price − cost |
| Margin from markup | margin = markup ÷ (1 + markup) |
| Cost from price and markup | cost = price ÷ (1 + markup) |
Example: a product costs $6 and you apply a 150% markup. Price = $6 × 2.5 = $15. Profit = $9. Margin = $9 ÷ $15 = 60%.
Markup vs margin
The same sale produces two different percentages:
| Cost | Price | Markup | Margin |
|---|---|---|---|
| $10 | $12.50 | 25% | 20% |
| $10 | $15 | 50% | 33.3% |
| $10 | $20 | 100% | 50% |
| $10 | $25 | 150% | 60% |
| $10 | $30 | 200% | 66.7% |
| $10 | $40 | 300% | 75% |
A 100% markup (doubling the cost) is what retailers call keystone, and it equals a 50% margin.
Typical markups
- Keystone (100%) is the standard retail markup on wholesale cost in gifts, fashion, home and beauty.
- Grocery and convenience retailers often work with lower markups on fast-moving goods.
- Phone accessories and some cosmetics commonly carry markups of 200% or more at retail.
- Trades and B2B distributors often price from a list price with a discount rather than a markup.
The right markup is the one that covers your costs and overheads at your realistic sales volume while staying competitive. Our guide to pricing for wholesale walks through it, and the wholesale price calculator applies markup and keystone in one step.
Put your prices to work
Once your prices are set, build a price list or line sheet and share it as a PDF or a live link.