Markup & Markdown Calculator
Calculate selling price from cost and markup percentage, or find the sale price from markdown percentage.
Essential for retail pricing.
Markup and markdown are two sides of pricing strategy — markup increases a base cost to set a selling price, while markdown reduces a price from its original level. Despite their symmetry, the formulas are different, and confusing them is one of the most common errors in retail pricing.
Markup formulas (cost → price):
Selling Price = Cost × (1 + Markup %)
Markup % = (Selling Price − Cost) ÷ Cost × 100
Gross Profit = Selling Price − Cost
Markdown formulas (price → discounted price):
Sale Price = Original Price × (1 − Markdown %)
Markdown % = (Original Price − Sale Price) ÷ Original Price × 100
Dollar Savings = Original Price − Sale Price
The markup vs. margin distinction (critical):
Gross Margin % = Gross Profit ÷ Selling Price × 100
Markup % = Gross Profit ÷ Cost × 100
A 50% markup yields only a 33.3% margin. A 100% markup yields a 50% margin.
Worked example — Markup: A retailer buys a jacket for $45 and wants a 60% markup.
- Selling Price = $45 × 1.60 = $72.00
- Gross Profit = $72 − $45 = $27.00
- Gross Margin = $27 ÷ $72 = 37.5%
Worked example — Markdown: That same jacket, originally priced at $72, goes on a 25% markdown sale.
- Sale Price = $72 × (1 − 0.25) = $54.00
- Dollar savings = $72 − $54 = $18.00
- At $54 sale price, the original $45 cost still yields $9 gross profit — a 20% margin
Common retail markup benchmarks:
| Industry | Typical Markup |
|---|---|
| Grocery | 10–20% |
| Clothing/apparel | 100–150% |
| Electronics | 15–40% |
| Jewelry | 100–300% |
| Restaurants (food cost) | 200–400% |