Markup
Markup measures profit against cost.
A product costing $40 with a 50% markup has a $60 selling price and $20 gross profit. Markup answers how much has been added to the cost.
Free pricing and markup calculator
Turn cost and markup into a selling price.
Set a target markup or target gross margin, then see the selling price, gross profit and the other percentage measure.
$ is a display symbol only. Use the same currency for all amounts; no currency conversion is performed.
Enter unit amounts on the same basis and before sales tax. The result does not include overhead, discounts, payment fees or other costs unless they are included in unit cost.
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Gross margin
Margin measures profit against the selling price.
The same $20 gross profit on a $60 selling price is a 33.3% gross margin. Markup and margin use different denominators, so the percentages are not interchangeable.
From price to profit
Check every cost the price must support.
Gross profit still needs to cover rent, wages, software, marketing, finance costs, tax and owner pay. Test the sales volume needed before treating a price as viable.