Percent markup is the ratio of the profit made on an item to its original cost, expressed as a percentage. In simple terms, it represents how much you "mark up" the price of a product above what you paid for it. This is a critical metric for retailers, wholesalers, and manufacturers to ensure they are covering overhead costs and generating a net profit.
Markup vs. Margin: What's the Difference?
While often used interchangeably, markup and margin represent different financial perspectives:
Markup: Calculated as a percentage of the Cost. If you buy something for $100 and sell it for $150, your markup is 50%.
Margin: Calculated as a percentage of the Selling Price. If you sell something for $150 and the cost was $100, your profit is $50, which is 33.3% of the selling price.
The Markup Formula
To calculate the markup percentage manually, use the following formula:
Markup % = [(Selling Price – Cost) / Cost] × 100
Example Calculations
Item
Cost
Selling Price
Markup %
Widget A
$20.00
$30.00
50%
Gadget B
$100.00
$125.00
25%
Software License
$500.00
$800.00
60%
Why Use a Markup Calculator?
Setting prices manually can lead to human error, which directly impacts your bottom line. Using a Percent Markup Calculator helps businesses:
Maintain Consistency: Apply uniform pricing strategies across different product categories.
Protect Profits: Ensure that the markup accounts for variable costs and target net income.
Quick Comparisons: Rapidly see how changing your selling price affects your markup percentage versus competitors.
function calculateMarkupPercent() {
var cost = parseFloat(document.getElementById("cost1").value);
var revenue = parseFloat(document.getElementById("revenue1").value);
var resDiv = document.getElementById("result1");
if (isNaN(cost) || isNaN(revenue) || cost <= 0) {
alert("Please enter valid positive numbers for Cost and Selling Price.");
resDiv.style.display = "none";
return;
}
var profit = revenue – cost;
var markup = (profit / cost) * 100;
var margin = (profit / revenue) * 100;
document.getElementById("markupRes").innerText = markup.toFixed(2) + "%";
document.getElementById("profitRes").innerText = "$" + profit.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("marginRes").innerText = margin.toFixed(2) + "%";
resDiv.style.display = "block";
}
function calculatePriceFromMarkup() {
var cost = parseFloat(document.getElementById("cost2").value);
var markupPercent = parseFloat(document.getElementById("markupPercent2").value);
var resDiv = document.getElementById("result2");
if (isNaN(cost) || isNaN(markupPercent) || cost < 0) {
alert("Please enter valid numbers for Cost and Markup Percentage.");
resDiv.style.display = "none";
return;
}
var profit = cost * (markupPercent / 100);
var sellingPrice = cost + profit;
document.getElementById("priceRes").innerText = "$" + sellingPrice.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
document.getElementById("profitRes2").innerText = "$" + profit.toLocaleString(undefined, {minimumFractionDigits: 2, maximumFractionDigits: 2});
resDiv.style.display = "block";
}