How this calculator works
Markup is the percentage added to the cost to arrive at the selling price. It is calculated as: Selling Price = Cost * (1 + Markup / 100). Markup is commonly used in retail, wholesale, and service pricing to ensure a desired return.
Markup is not the same as profit margin. Markup is based on cost, while profit margin is based on revenue. A 50% markup on a $40 item gives a $60 selling price, but the profit margin on that $60 sale is only 33.33%. The higher the markup, the wider the gap between markup percentage and profit margin. Compare markup with Percentage Profit to see the difference clearly.