Markup Calculator
Markup from a cost
Enter the cost, then either the price you charge or the percentage you add.
Fill in the fields above and the answer appears here.
What is markup?
Markup is what you add to a cost to reach a price, written as a percentage of that cost. Buy at £24, sell at £40, and the £16 you added is 66.67% of what you paid.
Measure the same £16 against the £40 the customer paid and you get 40%, the margin. Neither is more correct. Markup answers how much do I add, margin answers how much do I keep. Because cost is always the smaller number on a profitable sale, markup always comes out larger.
It matters because trade conversations use the two words interchangeably. A supplier saying they work on forty, and a buyer hearing forty, can be eight pounds apart on a thirty pound item and neither of them will notice until the invoice arrives. Our margin vs markup guide works that example through in full.
How do you decide what markup to apply?
Work backwards from the margin you need instead of forwards from whatever you did last year.
Start with the overhead. If rent, wages and the rest cost £8,000 a month against £30,000 of turnover, roughly 27% of every sale is spoken for before you earn anything. A gross margin under that guarantees a loss no matter how busy the shop looks on a Saturday. Convert the margin you need into a markup with the calculator above, then apply it.
Adjust per line after that, not across the range. Fast-moving stock can carry less because volume recovers the overhead for you. Slow, bulky or fragile stock needs more, because it takes up space for months and occasionally gets written off. One blanket percentage across a catalogue is easy to administer and wrong at both ends of it.
Then check the market. A markup that produces a price nobody pays is arithmetic without a customer. Where the market has already fixed the price, the only lever left is the cost side, which is where the gross margin calculator and a difficult conversation with your supplier earn their keep.
Is keystone pricing still useful?
Keystone means doubling the cost. A 100% markup, a 50% margin. It survives in gift, fashion and homeware because it takes two seconds and leaves enough room to discount later without going underwater.
It breaks in a few places. Where carriage is heavy against unit value, doubling the ex-works cost funds almost nothing once the pallet charge lands. Where returns run high, as in clothing sold online, the real cost of a sale includes the items that come back. And where customers have a reference price in their heads, doubling the cost just prices you out of the conversation.
Treat it as a starting point you then test. Put the keystone price into the calculator above, read the margin it produces, and hold that against what your overhead actually needs.
Markup to margin quick reference
| Markup applied | Margin produced | Price on a £30 cost |
|---|---|---|
| 10% | 9.09% | £33.00 |
| 20% | 16.67% | £36.00 |
| 25% | 20% | £37.50 |
| 30% | 23.08% | £39.00 |
| 40% | 28.57% | £42.00 |
| 50% | 33.33% | £45.00 |
| 66.67% | 40% | £50.00 |
| 75% | 42.86% | £52.50 |
| 100% | 50% | £60.00 |
| 150% | 60% | £75.00 |
| 200% | 66.67% | £90.00 |
| 300% | 75% | £120.00 |
The full lookup in both directions is on the margin to markup chart.