Calculate a selling price from cost and markup, with the margin shown.
Selling price
$100.00
$40.00 profit on $60.00 cost
Formula
60 × (1 + 66.67 ÷ 100) = $100.00
What this assumes
Standard retail
A 100% markup, or keystone pricing
50Modest markup
Typical of wholesale
25From an existing price
What markup does this represent?
120What the item costs you, including anything you count as direct cost.
The selling price and the resulting profit are calculated immediately.
The margin figure shows what share of the sale price is profit, which is what your accounts will report.
Markup is how pricing actually works in practice — you know what you paid, and you add to it.
Every markup implies a margin. Showing it stops the two being confused when you set targets.
Working out the markup implied by an existing price is useful when reviewing a supplier’s or competitor’s pricing.
Apply a markup to a cost to get a selling price, or work out what markup an existing price represents. The resulting margin is always displayed alongside, since that is the figure that tells you what proportion of each sale is actually profit. Markup is the more natural way to price — you start from what something cost you — but margin is what appears in your accounts, and the two are easy to conflate.
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