Calculate selling price from cost and markup %, or work backwards from price to find markup or cost. Shows both markup percentage and gross margin side by side.
Markup is profit divided by cost. Gross margin is profit divided by selling price. A 50% markup gives a 33.3% margin — they are never equal except at 0%. Always clarify which is meant in business discussions.
Selling price = Cost × (1 + Markup / 100). For a product costing Rs 1,000 with 50% markup: 1,000 × 1.5 = Rs 1,500 selling price, giving Rs 500 gross profit.
Grocery: 15-25%. Retail clothing: 50-100%. Furniture: 100-200%. Electronics: 10-30%. Restaurants: 200-400% on food cost. Pharmaceuticals: 100-200%. Higher competition typically forces lower markup.
Gross Margin = Markup / (1 + Markup). For 50% markup: 0.5 / 1.5 = 33.3% gross margin. To go back: Markup = Margin / (1 - Margin). For 33.3% margin: 0.333 / 0.667 = 50% markup.
Keystone markup doubles the wholesale cost to set the retail price (100% markup = 50% gross margin). Common in retail as a quick rule of thumb. Some categories like jewellery use much higher markups.
Markup = Margin / (1 - Margin) = 0.40 / 0.60 = 66.7%. At this markup, every Rs 100 of revenue leaves Rs 40 gross profit after deducting the Rs 60 cost.
Small markup changes have large profit impact. Increasing markup from 50% to 55% on a Rs 1,000 cost product raises revenue from Rs 1,500 to Rs 1,550 — a Rs 50 increase in gross profit per unit sold.