Pricing questions come in many shapes. A buyer knows the cost and wants a price; a salesperson knows the price and the margin target and needs to know the most they can pay; an owner looks at a finished sale and wants the markup. All of them are the same four-way relationship between cost, price, markup and margin. Pick the two values you know and this calculator returns the rest.
How to use the price calculator
- Choose which two values you know from the list: cost and markup, cost and margin, cost and profit, cost and price, price and markup, price and margin, or price and profit.
- Enter those two values. Only the fields you need are shown.
- The tape shows the missing value first, followed by cost, price, profit, markup and margin. The table lists prices for the same cost at common markup and margin targets.
Pricing formulas
Worked example
A product costs $25.
Cost + 60% markup: price = 25 × 1.60 = $40.00; profit = $15; margin = 15 ÷ 40 = 37.5%
Cost + 37.5% margin: price = 25 ÷ 0.625 = $40.00 — the same price, described the other way
Price $40 with $15 profit: cost = 40 − 15 = $25.00; markup 60%, margin 37.5%
Prices for a $25 cost
| Target | Price | Profit per unit |
|---|---|---|
| 25% markup | $31.25 | $6.25 |
| 50% markup | $37.50 | $12.50 |
| 100% markup | $50.00 | $25.00 |
| 20% margin | $31.25 | $6.25 |
| 30% margin | $35.71 | $10.71 |
| 40% margin | $41.67 | $16.67 |
| 50% margin | $50.00 | $25.00 |
Notice the pairs that match: a 25% markup equals a 20% margin, and a 100% markup equals a 50% margin.
Choosing a pricing method
Cost-plus pricing
Adding a fixed markup to cost is simple and transparent, which is why it is common in construction, distribution and government contracting. Its weakness is that it ignores what customers are willing to pay.
Margin targets
Retailers and finance teams usually plan in margins because margins compare directly with the income statement: a 40% gross margin means 40 cents of every sales dollar is available for overhead and profit.
Value and competitive pricing
Many businesses start from what the market will bear and work backward to the maximum cost they can accept. Choose price and margin in the calculator to find that ceiling: at a $40 price and a 45% target margin, the cost must be $22 or less.
Fees and price endings
If a marketplace or card processor takes a percentage of every sale, a simple markup will undershoot your target. The selling price calculator builds fees into the price and rounds to endings like .99. For more on the difference between the two percentages, see the margin calculator and the markup calculator.
Results are estimates for pricing decisions and use a single unit cost; they are not accounting or financial advice.
Frequently asked questions
How do I calculate a selling price from cost?
With a markup, multiply the cost by 1 plus the markup: $25 × 1.6 = $40 for a 60% markup. With a target margin, divide the cost by 1 minus the margin: $25 ÷ 0.625 = $40 for a 37.5% margin. Both describe the same price.
How do I work out the cost from a selling price?
With a known margin, multiply the price by 1 minus the margin. With a known markup, divide the price by 1 plus the markup. A $40 price with a 37.5% margin or a 60% markup implies a $25 cost.
Why do markup and margin give different percentages for the same price?
Markup measures profit against cost; margin measures it against price. Since the price is larger than the cost, the margin percentage is always smaller. A 60% markup and a 37.5% margin describe the same $15 profit on a $25 item sold at $40.
Can I solve for the price from cost and a dollar profit?
Yes. Choose cost and profit; the price is simply cost plus profit, and the calculator then shows the markup and margin that profit represents.