Enter any two of cost, markup, and price and get the third, with the margin alongside. Add a second markup to see how a wholesale-to-retail chain compounds, which is how a $10 cost honestly becomes a $28 shelf price.
Markup prices from the number you actually know
Markup is the pricing tool that starts where you start: the cost. Add 40% to a $10 landed cost and the price is $14. The formula never gets harder than cost × (1 + markup), and this page runs it in all three directions: forward to a price, backward from a price to the markup it contains, and sideways from a shelf price to the cost hiding under it, which is how buyers read a supplier's quote and how anyone reads a competitor's shelf.
One vocabulary note before the money math: markup divides profit by cost. Its sibling, margin, divides the same profit by price, so the same sale always shows a smaller margin than markup. The two get swapped constantly and expensively; every result here shows both, and our markup vs margin calculator exists for the argument itself.
The formula
Price = Cost × (1 + Markup) Markup = (Price − Cost) ÷ Cost Cost = Price ÷ (1 + Markup)
Chained markups: Total = (1 + m1) × (1 + m2) − 1
Markups are decimals in the formulas (40% = 0.4). The chain formula is the one that surprises people: stacked markups multiply, they do not add.
Worked example
A maker's landed cost is $10. They wholesale at a 40% markup: 10 × 1.4 = $14, keeping $4 (a 28.6% margin).
The retailer applies keystone, a 100% markup: 14 × 2 = $28 on the shelf. The total markup from maker's cost to shelf is (28 − 10) ÷ 10 = 180%, not the 140% that adding 40 and 100 would suggest, because the second markup was charged on the first one's profit too. The shelf price carries a 64.3% margin over the original cost.
Keystone, chains, and reading a shelf backwards
Retail's oldest convention is keystone pricing: double the wholesale cost, a 100% markup, a 50% margin, arithmetic a busy buyer can do while walking. It survives because it leaves room for discounting and shrinkage, not because it is optimal, and whole categories run above it (jewelry, eyewear, greeting cards) or far below it (electronics, groceries).
The chain math explains a question every maker eventually asks: "my product costs $10, why is it $28 in the store?" Nobody in that chain is greedy; two ordinary markups compounded. It also works in reverse as a negotiating tool: if you know the shelf price and the customary markups in your category, the price-and-markup mode tells you roughly what everyone upstream is paying, which is worth knowing before you sit down. And once your own markup is set, two neighbouring questions follow: whether the margin it produces covers your bills at your volume (our break-even calculator takes it from here), and what happens after fees and fulfillment if you sell through Amazon (the FBA calculator's whole job).
Frequently asked questions
How do I calculate markup?
Subtract the cost from the selling price and divide by the cost. Buy at $10 and sell at $14 and the markup is 4 divided by 10, which is 40%. Going the other way, price equals cost times (1 plus the markup as a decimal).
What is the difference between markup and margin?
The denominator. Markup divides profit by cost; margin divides the same profit by price. A 40% markup is a 28.6% margin, and the gap grows with the numbers. Use markup to set prices and margin to judge the business, and never let one word do the other one's math.
What is keystone pricing?
Retail's convention of doubling the wholesale cost: a 100% markup, which is exactly a 50% margin. It persists because the mental math is instant and it leaves room for discounts and shrinkage. Plenty of categories run above it and plenty below; it is a starting point, not a law.
Why do stacked markups not simply add up?
Because each markup in a chain is charged on the previous price, profit included. A 40% wholesale markup followed by a 100% retail markup is 1.4 times 2.0, a 180% total markup, not 140%. That compounding is the honest answer to why a $10 product costs $28 in a store.
How do I work out the cost from a selling price?
Divide the price by (1 plus the markup as a decimal). A $28 shelf price at a customary 100% retail markup implies the store paid about $14. It is an estimate that depends on knowing the customary markup, but it is usually close enough to negotiate with.
What is a typical markup?
There is no useful universal figure, because markup conventions are category habits. Groceries run thin, apparel often runs keystone or above, jewelry and eyewear famously run several hundred percent, and restaurants mark food up 200% to 300% to pay for everything that is not food. Learn your category's convention; ignore cross-industry averages.
Can a markup be more than 100%?
Easily, and often legitimately. A 100% markup only doubles the cost; a $2 greeting card sold for $6 carries a 200% markup and a 66.7% margin. Markup has no ceiling, unlike margin, which can never reach 100%. High markups usually pay for everything around the product: rent, staff, spoilage, and the ones that do not sell.
Does markup include shipping and fees?
It should be applied to your landed cost: the product plus freight, duties, and inbound costs. Marking up the factory price alone quietly donates your shipping budget to the customer. Selling through marketplaces adds outbound fees too; our FBA calculator prices that fee stack per unit.