Pricing Calculator Formula
Understand the math behind the pricing calculator. Each variable explained with a worked example.
Formulas Used
Selling Price
selling_price = cost * (1 + markup_pct / 100)Profit Per Unit
profit = cost * markup_pct / 100Resulting Margin
margin_pct = (1 + markup_pct / 100) > 0 ? (markup_pct / 100) / (1 + markup_pct / 100) * 100 : 0Variables
| Variable | Description | Default |
|---|---|---|
cost | Cost(USD) | 75 |
markup_pct | Desired Markup(%) | 50 |
How It Works
How to Calculate Selling Price
Formula
Selling Price = Cost x (1 + Markup% / 100) Resulting Margin = Markup% / (100 + Markup%)
Setting the right price is a balance between covering costs, making a profit, and remaining competitive. This calculator helps you find your selling price and see both markup and margin.
Worked Example
A product costs $75 and you want a 50% markup.
- 01Selling price = $75 x (1 + 50/100) = $75 x 1.50 = $112.50
- 02Profit per unit = $112.50 - $75 = $37.50
- 03Resulting margin = $37.50 / $112.50 x 100 = 33.33%
Frequently Asked Questions
How do I choose the right markup?
Consider your industry norms, competition, target customer, and overhead costs. Retail typically uses 50-100% markup, wholesale 10-30%, and luxury goods 100-400%+.
Should I price based on markup or margin?
Both work, but be consistent. Margin is often preferred for financial analysis because it directly shows what percentage of revenue is profit. Markup is more intuitive for setting prices from cost.
Learn More
Guide
Break-Even Analysis Guide
Learn how to perform a break-even analysis for your business. Understand fixed costs, variable costs, contribution margin, and how to find the break-even point.
Ready to run the numbers?
Open Pricing Calculator