- Enter the unit cost. Use landed cost for one item.
- Enter the selling price. Use the actual or planned net price.
- Review markup. This shows profit relative to cost.
- Compare gross margin. This shows profit relative to revenue and is often used in reporting.
Retail Markup Calculator
The Retail Markup Calculator measures how much a selling price exceeds product cost and can also show the corresponding gross margin. Markup is expressed as a percentage of cost, while gross margin is expressed as a percentage of selling price; both describe the same dollar spread from different viewpoints.
Buyers and retail managers can use the calculator to audit pricing rules, compare categories, or evaluate a proposed price before publishing it. The dollar profit shown is a gross amount before fixed operating expenses, returns, and taxes. For a blended assortment, use representative average cost and price or calculate key products separately.
Calculator inputs
USD
USD
Result
—
Calculated result
Gross profit per unit—
Gross margin—
Price multiplier—
Markup % = (Selling price − Unit cost) ÷ Unit cost × 100
Gross margin % = (Selling price − Unit cost) ÷ Selling price × 100
Price multiplier = Selling price ÷ Unit cost
Unit cost must be greater than zero to calculate markup.
What the result means
The main result shows the percentage added to unit cost to reach the entered selling price.
A high markup does not necessarily mean high net profit because operating costs and markdowns are not included.
Given: unit cost $35 and selling price $59.
Calculation: Gross profit = $59 − $35 = $24. Markup = $24 ÷ $35 × 100 = 68.57%. Gross margin = $24 ÷ $59 × 100 = 40.68%.
Result: The price carries a 68.57% markup and a 40.68% gross margin.
Why are markup and margin different percentages?
They use different denominators: markup uses cost, while margin uses selling price.
Can markup be negative?
Yes. It is negative when selling price is below unit cost, indicating a gross loss per unit.
Should I use list price or sale price?
Use the price customers are expected to pay after typical discounts.
What if cost is zero?
Markup is undefined when cost is zero, although dollar profit and gross margin may still be described separately.
Which metric is better for financial reporting?
Gross margin is commonly used for income statement analysis, while markup is often used to set prices from cost.