# How to Calculate Markup: Formula, Excel and Margin Math

- URL: https://betteranalyst.com/metrics/markup
- Published: 2026-10-31
- Updated: 2026-10-31
- Author: David Bressler, Founder (https://betteranalyst.com/authors/david-bressler)

> **Summary:** Markup = (Selling price − Cost) ÷ Cost. It measures how much you add on top of cost. A candle that costs $8.40 and sells for $22.00 has a 161.9% markup, which is a 61.8% margin. To price from a target markup, use Price = Cost × (1 + Markup).

Category: [Ecommerce](https://betteranalyst.com/metrics#ecommerce)

Markup formula with a retail pricing example, the Excel formula per product, and how to convert between markup and margin without mispricing.

## Markup formula

```
Markup % = (Selling price − Unit cost) ÷ Unit cost × 100
```

- **Selling price**: The price the customer pays per unit, before sales tax.
- **Unit cost**: What the unit costs you landed: wholesale or production cost plus inbound freight and duties.

## How to calculate markup in Excel and Google Sheets

Excel, using the cells in the worked example below:

```
=(C2-B2)/B2
```

## Worked example

A gift shop is reviewing prices on three best sellers after its supplier raised costs, and wants markup and margin side by side.

*Unit cost and selling price (table starts in cell A1)*

| Product | Unit cost | Selling price |
| --- | --- | --- |
| Soy candle | $8.40 | $22.00 |
| Ceramic mug | $5.10 | $16.00 |
| Canvas tote | $6.75 | $18.00 |

1. Candle markup = (22.00 − 8.40) ÷ 8.40 = 13.60 ÷ 8.40 = 161.9%.
2. Candle margin = 13.60 ÷ 22.00 = 61.8%. Same $13.60 profit, different base.
3. Fill =(C2-B2)/B2 down column D: mug 213.7%, tote 166.7%.
4. To keep a 160% markup on the candle if cost rises to $9.20: price = 9.20 × (1 + 1.60) = $23.92.

**Result:** 161.9% markup on the soy candle (61.8% margin)

## How to interpret markup

Markup is a pricing tool; margin is a profitability measure. Retailers often think in markup when setting prices ('keystone' pricing is a 100% markup, which equals a 50% margin), while finance reports margin. Convert between them with Margin = Markup ÷ (1 + Markup) and Markup = Margin ÷ (1 − Margin). A store that needs a 60% gross margin must mark up 150%, not 60%. Check realised markup after discounts, since a 20%-off sale on a 100% markup leaves only a 60% markup.

## Common mistakes

- Pricing with margin when you meant markup. Adding a 40% 'margin' to cost ($10 × 1.4 = $14) only yields a 28.6% margin.
- Using supplier price instead of landed cost. Freight, duties and packaging can add several points of cost.
- Averaging markup percentages across products with very different volumes. Weight by units or revenue.
- Ignoring discounts. Report markup at the price customers actually paid, not the ticket price.

## Calculate markup with Better Analyst

Connect your data or upload a spreadsheet, then ask in plain English. Better Analyst writes and runs the calculation and shows the steps, so you can check the number.

- “Calculate markup and margin for every SKU in this price list and flag anything under 100% markup.”
- “What prices keep a 150% markup after the new supplier costs?”
- “Show realised markup by month after discounts.”

Usually calculated from: [Google Sheets](https://betteranalyst.com/data-connectors/google-sheets), [Airtable](https://betteranalyst.com/data-connectors/airtable), [MySQL](https://betteranalyst.com/data-connectors/mysql), [PostgreSQL](https://betteranalyst.com/data-connectors/postgresql), [Google BigQuery](https://betteranalyst.com/data-connectors/bigquery).

[Try Better Analyst free](https://betteranalyst.com/signup)

## Further reading

- [Markup calculator](https://betteranalyst.com/markup-calculator)
- [Gross margin formula](https://betteranalyst.com/metrics/gross-margin)
- [Discount calculator](https://betteranalyst.com/discount-calculator)
- [Calculate percentages in Excel](https://betteranalyst.com/excel/how-to-calculate-percentage-in-excel)

## Frequently asked questions

### What is the difference between markup and margin?

Both use the same profit per unit (price − cost). Markup divides it by cost; margin divides it by price. A $10 item sold for $15 has a 50% markup and a 33.3% margin.

### How do I convert margin to markup?

Markup = Margin ÷ (1 − Margin). A 40% margin is 0.40 ÷ 0.60 = 66.7% markup. The reverse is Margin = Markup ÷ (1 + Markup).

### How do I set a price from a target markup in Excel?

Multiply cost by one plus the markup: =B2*(1+0.6) for a 60% markup. For a target margin instead, divide: =B2/(1-0.4) for a 40% margin.

## Related metrics

- [Gross Margin Formula: How to Calculate Gross Margin in Excel](https://betteranalyst.com/metrics/gross-margin)
- [Break-Even Point Formula: Units and Revenue (Excel Example)](https://betteranalyst.com/metrics/break-even-point)