Free calculator
Markup Calculator: Price, Margin and Markup Converter
Enter a product's cost and the markup you want, and you get the selling price, the profit per unit and the margin that price carries. Or enter cost and price to get the markup and margin you already have. Markup is profit over cost; margin is profit over price, and only margin tells you what your ads can afford. Nothing you type leaves your browser.
Calculator
Price a Product From Its Cost and Markup
The form holds a worked example: a $40 cost with a 60% markup. Replace it with your numbers; the results update as you type. The second form below runs the other way, from cost and price to markup.
The other way
Already Have a Price? Find Its Markup
Cost and selling price in; markup, margin and profit per unit out. A price below cost shows negative figures in red.
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The idea
Markup vs Margin in One Paragraph
Markup and margin describe the same $24.00 of profit on a $40.00 product sold at $64.00. Markup divides the profit by the cost: $24 ÷ $40 = 60.00%. Margin divides it by the price: $24 ÷ $64 = 37.50%. Markup answers "how much did I add to the cost"; margin answers "how much of each dollar of revenue is mine". Markup is always the larger figure, and the gap between them widens as the price climbs above cost.
Ads math needs the margin. Every dollar of ad spend is paid out of revenue, and margin is the share of revenue that is profit, so break-even ROAS is 1 ÷ margin: 1 ÷ 0.375 = 2.67x. Put the markup in by mistake and you get 1 ÷ 0.60 = 1.67x, a target that loses about 37 cents on every dollar of ad spend it approves. The ROAS calculator takes the margin from here and adds your fee and profit goal; the ROAS formula guide shows where 1 ÷ margin comes from.
The two convert both ways. Margin = markup ÷ (1 + markup): 0.60 ÷ 1.60 = 37.50%. Markup = margin ÷ (1 - margin): 0.375 ÷ 0.625 = 60.00%. A markup can pass 100% and keep going; a margin never reaches 100%, because the cost is always part of the price.
cost × (1 + markup)$40 × 1.60 = $64.00(price - cost) ÷ cost$24 ÷ $40 = 60.00%(price - cost) ÷ price$24 ÷ $64 = 37.50%markup ÷ (1 + markup)0.60 ÷ 1.60 = 37.50%margin ÷ (1 - margin)0.375 ÷ 0.625 = 60.00%1 ÷ margin1 ÷ 0.375 = 2.67xConversion table
Markup to Margin Conversion Table
Six common markups, the margin each one carries and the break-even ROAS that margin sets.
| Markup | Margin (markup ÷ (1 + markup)) | Break-even ROAS (1 ÷ margin) |
|---|---|---|
| 25% | 20.00% | 5.00x |
| 50% | 33.33% | 3.00x |
| 60% (example) | 37.50% | 2.67x |
| 100% | 50.00% | 2.00x |
| 150% | 60.00% | 1.67x |
| 200% | 66.67% | 1.50x |
Keystone pricing, a 100% markup, is a 50% margin. The two words are often swapped in that sentence, and the swap is expensive: a store that believes it has a 100% margin and sets a 1.00x ROAS target loses half of every ad dollar. The table shows that margin climbs slowly once markup passes 100%. Doubling the markup from 100% to 200% adds 16.67 points of margin and cuts the break-even ROAS from 2.00x to 1.50x.
Conversions
Three Conversions You Will Use
The same $40 cost, worked each way. The third one is the question most pricing meetings end on.
Markup to margin
Margin = markup ÷ (1 + markup). A supplier who suggests a 60% markup is suggesting a 37.50% margin: 0.60 ÷ 1.60. That margin, not the 60%, goes into the ROAS calculator.
Margin to markup
Markup = margin ÷ (1 - margin). A 40% margin target is a 66.67% markup: 0.40 ÷ 0.60. A 50% margin is a 100% markup, and a 60% margin needs a 150% markup.
Price from a target margin
Price = cost ÷ (1 - margin). For a 50% margin on the $40 product, $40 ÷ 0.50 = $80.00. Dividing by (1 - margin) instead of multiplying by (1 + margin) is the step most spreadsheets get wrong: $40 × 1.50 = $60 carries only a 33.33% margin.
In the store
Discounts, Shopify Costs and Your Ad Targets
Three places the markup number meets the real store.
Discounts cut margin faster than markup
A 10% code on the $64 product makes it a $57.60 sale. The markup falls from 60.00% to 44.00%; the margin falls from 37.50% to 30.56%, and the break-even ROAS rises from 2.67x to 3.27x. At 20% off the price is $51.20, the markup 28.00%, the margin 21.88% and the break-even 4.57x. Every discount needs its own margin and its own ROAS target.
Where Shopify shows cost per item
In the Pricing section of each product and variant in the Shopify admin, beside the price and the compare-at price. Shopify's Help Center lists cost per item among the pricing details used to track costs and profits, and the admin shows the profit and margin for that price once a cost is entered. Fill it in for every variant; the Shopify profit margin calculator then takes shipping, fees and returns off the same order.
Markup sets the price, margin sets the bid
Markup is a pricing tool: cost plus a share of cost gives the shelf price. Margin is an advertising tool: it says how much of each sale can pay for the click that caused it. A product with a 37.50% margin cannot carry a Target ROAS below 2.67x for long, whatever its markup says. Our Google Ads for online stores page shows how we set targets by product margin.
Common mistakes
Where Markup Math Goes Wrong
Six habits that make a product look more profitable than its ads will find it.
- Markup used as margin in a ROAS target. 60% markup is 37.50% margin. The break-even is 2.67x, not 1.67x.
- Cost taken from the supplier invoice alone. Landed cost adds inbound freight, duties and packaging. $40 on the invoice is often $44 on the shelf, which turns a 60% markup into 45.45%.
- Margin measured on the list price while the product sells at a discount. If most units go out with a 10% code, the working margin is 30.56%, not 37.50%.
- One markup for the whole catalog. A heavy item with a $12 shipping label and a light item with a $4 label cannot carry the same markup and end up with the same margin.
- Price set by multiplying by (1 + margin). $40 × 1.50 gives a 33.33% margin, not 50%. Divide by (1 - margin) instead: $40 ÷ 0.50 = $80.
- A markup benchmark compared with your margin. "Retail runs at 100%" describes markup. Against your 37.50% margin it is a comparison of two different things.
What is the markup formula?
Markup is profit divided by cost: (price - cost) ÷ cost. A $40 cost sold at $64 is ($64 - $40) ÷ $40 = 60.00%. To set a price from a markup, multiply the cost by 1 plus the markup: $40 × 1.60 = $64.00.
What is the difference between markup and margin?
Both start from the same $24 of profit. Markup divides it by the cost ($40) and gives 60.00%; margin divides it by the price ($64) and gives 37.50%. Markup is always the larger number for the same product, and the gap widens as markup rises: a 100% markup is a 50% margin, and a 200% markup is a 66.67% margin.
How do I convert margin to markup?
Markup = margin ÷ (1 - margin). A 37.50% margin is 0.375 ÷ 0.625 = 60.00% markup. The other way, margin = markup ÷ (1 + markup): 0.60 ÷ 1.60 = 37.50%. The conversion table on this page lists both for six common markups.
Why do ads need margin and not markup?
Ads are paid out of revenue, and margin is the share of revenue that is profit, so break-even ROAS is 1 ÷ margin: 1 ÷ 0.375 = 2.67x. Put the 60% markup in by mistake and the break-even comes out at 1.67x, a target that loses about 37 cents on every dollar of ad spend it approves.
Where does Shopify show cost per item?
In the Pricing section of each product and variant in the Shopify admin, next to the price and the compare-at price. Shopify's Help Center lists cost per item among the pricing details used to track costs and profits, and once a cost is entered the admin shows the profit and margin for that price beside it. Fill it in for every variant so the product reports can show margin by product.
Does the calculator store my numbers?
No. The math runs in your browser, and nothing you type is sent to us or saved anywhere.
Free audit
Do Your Ads Clear This Product's Break-Even?
Send us the account and the margins you got here. We tell you whether we found what is holding the return back and name one or two issues before any work starts.
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Sources
Sources and Related Pages
- Shopify Help Center, Product prices: help.shopify.com/en/manual/products/details/product-pricing. Lists unit pricing, compare-at pricing and cost per item as the pricing details a product can carry. Read on October 25, 2026.
- Shopify Help Center, Pricing your products: help.shopify.com/en/manual/products/details/product-pricing/determine-pricing. Defines cost-plus pricing as production cost plus a fixed markup percentage, with the example of a $45 CAD cost and a 35% markup selling for $60.75 CAD. Read on October 25, 2026.
- Logical Gecko, ROAS Formula: How to Calculate ROAS and Break-Even ROAS.
- Logical Gecko, Free Google Ads audit.