Retail Markup Calculator
Calculate selling price from wholesale cost and profit margin.
Returns markup percentage, gross profit per unit, and the difference between markup and margin.
Retail markup and margin are two closely related but different measures of profitability that every retailer must understand clearly.
Markup formula (cost-based):
Selling Price = Cost × (1 + Markup Percentage / 100)
Markup % = ((Selling Price − Cost) / Cost) × 100
Gross Margin formula (revenue-based):
Gross Margin % = ((Selling Price − Cost) / Selling Price) × 100
Relationship between markup and margin:
Margin = Markup / (1 + Markup)
Markup = Margin / (1 − Margin)
What each variable means:
- Markup — profit expressed as a percentage of your cost (the supplier’s perspective)
- Gross Margin — profit expressed as a percentage of selling price (the retailer’s perspective)
- A 50% markup ≠ 50% margin — this confusion costs retailers money
Worked example: You buy a product for $40 and sell it for $70.
Markup = (($70 − $40) / $40) × 100 = 75% Gross Margin = (($70 − $40) / $70) × 100 = 42.9%
To achieve a 50% gross margin on a $40 item: Selling price = $40 / (1 − 0.50) = $80
Typical markup by retail category:
- Grocery staples: 5–20%
- Clothing and apparel: 100–200%
- Electronics: 10–30%
- Jewelry: 200–400%
- Restaurants (food): 200–300%
- Furniture: 200–400%
Always calculate margin (not just markup) when comparing profitability across product lines — it maps directly to your gross profit percentage on the income statement.