Markup Formulas
Selling Price = Cost × (1 + Markup %)
Markup % = (Price − Cost) ÷ Cost × 100
Markup Is Based on Cost, Not Price
Unlike profit margin (which is based on the selling price), markup is calculated as a percentage of your cost. This distinction matters: a 100% markup on a $50 cost item results in a $100 selling price — a 50% profit margin, not 100%.
Converting Between Markup and Margin
If you know your markup percentage, you can convert to margin using: Margin = Markup ÷ (100 + Markup) × 100. Understanding both metrics helps avoid pricing mistakes from confusing the two.