ClarityHow to use this tool
- Enter cost per unit, desired markup.
- Select Calculate to view the result.
- Check the method and assumptions below before using the result.
Input reference and sample values
Use the units and choices shown for each field. Sample values are provided for practice, not as recommendations.
| Input | Format and units | Sample |
|---|---|---|
| Cost per unit | Numeric value. Unit: money. Must be greater than zero. | 80 |
| Desired markup | Numeric value. Unit: %. Zero or positive. Maximum: 100000. | 25 |
Result for these sample inputs
100 currency units
- Profit per unit
- 20
- Profit margin (%)
- 20
- Cost per unit
- 80
Select Try the example in the form to load these values and calculate them again. This replaces the current form inputs. Compare the result with the method and worked explanation below.
The method, explained
Selling price = cost × (1 + markup ÷ 100). Unit profit = selling price − cost. Margin = unit profit ÷ selling price × 100.
A cost of 80 with a 25% markup gives a selling price of 100 and profit of 20. The corresponding profit margin is 20%, not 25%.
Understanding your result
A markup is added to cost. A 25% markup does not create a 25% margin. Compare the selling price and resulting profit margin before setting a price.
What to keep in mind
Markup is based on cost, not the selling price. Taxes, delivery and operating costs are excluded unless included in your cost figure. This model does not estimate demand at the calculated price.
Common questions
Is 25% markup the same as 25% margin?
No. Markup divides profit by cost; margin divides it by selling price. A 25% markup corresponds to a 20% margin.
How do I check an existing price?
Use Profit Margin Calculator with the existing selling price as revenue and the unit cost as cost. This tool instead starts with a target markup.
Methodology maintained by ClarityKit. How these tools are built and checked.