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Markup calculator

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Markup Calculator

Calculate markup using Zoho Invoice's Markup Calculator to ensure your prices cover the costs, generate profit, and align with the existing market demand.

Cost of an item/service:
Please enter a valid amount
Enter your Selling Price here Enter your Profit Markup here
Please enter a valid input

0%

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What is markup?

Markup or markup percentage is the amount that is added to the cost price in order to determine the final selling price. In other words, it is the difference between the cost price and the selling price that is usually expressed as a percentage of the cost price. Marking up prices not only helps businesses generate profit but also assists them in paying for their costs and operating expenses. Businesses should know how to mark up prices so they can alter their pricing strategy based on market demand, competitor pricing, and rising costs.

Markup Formula

The formula to calculate the markup percentage is

Selling price minus cost price divided by cost price multiplied by one hundred

How to calculate markup using Zoho Invoice's free markup calculator

Get your perfect selling price in seconds! Follow these four simple steps to calculate the markup effortlessly using Zoho Invoice's free markup calculator.

  • Step 1

    The first step is to input the cost price. Your cost includes any expenses associated with the production of a sale item (such as raw material or labor). Use the Cost of an item or a service text box for this purpose.

  • Step 2

    If you have any additional expenses like interests, taxes, or operating expenses, include them by clicking Add a new cost. If not, skip this part.

  • Step 3

    The calculator is set to Profit Markup by default. To calculate profit markup, simply enter the selling price, and the calculator will display the markup automatically.

  • Step 4

    If your goal is to find the selling price of your product, then switch the calculator to Selling Price and enter the profit markup percentage that you wish to apply. The calculator will automatically give the selling price with the markup percentage included.

Markup vs. margin: What's the difference?

Profit margin and markup are two different perspectives of viewing profit. Here are the key differences found in these significant business metrics:

Profit Margin Profit Markup
Margin is the percentage of profit that remains after deducting certain costs from the total revenue. Markup is the amount added to the cost price to get the selling price of the product.
Businesses calculate margin based on the selling price. Markup, on the other hand, is calculated based on the cost price.
Calculating margin helps businesses assess their financial health, evaluate competitiveness, and measure how effectively they manage and reduce costs. Determining markup helps businesses develop a pricing strategy that ensures cost coverage while accounting for overhead and potential risks.

Markup Examples

Markup Examples

Calculating markup when you know the selling price

Markup Percentage =

The profit percentage is calculated by subtracting $20 from $30, dividing the result by $20, multiplying by 100, which equals 50 percent.

How to calculate a selling price using markup percentage

A web development agency's total costs for a project, including the cost of development, tools, and hosting expenses, amount to $2,000. To apply a 40% markup, the selling price would be:

Cost Price = $2,000   Markup = 40%

Forty percent equals the difference between selling price and two thousand divided by two thousand.

First, forty percent multiplied by two thousand equals selling price minus two thousand. Then, eight hundred equals selling price minus two thousand. Next, eight hundred plus two thousand equals selling price. Finally, selling price equals two thousand eight hundred.

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