What is Markup?
Markup is the percentage added to your cost to set the selling price: price = cost x (1 + markup). A 50% markup on a $40 cost gives a $60 price. Don't confuse it with profit margin — markup is measured against cost, margin against price, and the numbers differ.
In practice
A retailer buys a lamp for $40 and applies 60% markup: $40 x 1.60 = $64 selling price. The $24 gross profit is a 37.5% margin — same dollars, different percentage.
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Open the markup calculatorFrequently asked questions
What's the difference between markup and margin?
Markup is profit as a percentage of cost; margin is profit as a percentage of price. 50% markup = 33% margin. Mixing them up is the classic pricing error.
What markup should I use?
It varies wildly by industry — retail often 50–100%, trades price labor differently than materials. Know your costs first, then pick a markup that hits your margin target.
Should materials and labor have the same markup?
Usually not. Many contractors mark up materials modestly (10–20%) and price labor at full hourly rates — the labor is where the profit lives.