How it works
How to price a product with markup
Enter your cost
The landed cost per unit - what you pay your supplier, plus inbound shipping and import duty. Skip marketing, payment fees, and overheads for now.
Set the markup percentage
Markup is the percentage added on top of cost. 100% markup doubles your price. 50% markup adds half again. Most ecommerce categories sit between 40% and 150%.
Read the three outputs
Retail price is what you charge. Gross profit is what you keep per unit. Gross margin is profit as a percentage of retail - the number you compare across products.
Markup vs margin - why they are not the same
Mixing up markup and margin is the most common pricing mistake in ecommerce. Here is the difference.
Markup is added on top of cost
A $25 cost with 60% markup becomes $25 + ($25 * 0.60) = $40 retail. The markup number describes your pricing rule, not your profitability.
Margin is profit as a share of retail
Same $40 retail with $15 profit gives 15 / 40 = 37.5% margin. Margin describes what you keep from every sale after direct costs. It is always smaller than the equivalent markup.
Why the confusion matters
If someone tells you their margin is 50%, they are making $50 on every $100 sold. If they tell you their markup is 50%, they are making $33 on every $100 sold. Different numbers, very different businesses.
Typical markups by category
Grocery and electronics run on 5% to 20% markup. Apparel averages 100% to 150%. Beauty and fragrance can hit 200% to 400%. Knowing your category benchmark tells you if you are under-pricing or competitive.
Markup only covers product cost
The markup here is a product-level pricing decision. It does not account for ad spend, fulfilment fees, returns, or payment processing. Your final net margin will be lower - model those separately in the CAC and profit margin calculators.
Keystone pricing (100% markup)
Keystone is the retail industry shorthand for doubling the cost. $10 becomes $20. It is a rule of thumb, not a law. Use it as a starting point, then adjust for perceived value, competition, and where your customers shop.
More free tools
All tools →- Profit margin calculatorMargin on every product, after cost, shipping and fees.
- Psychological pricing toolSix price variants for one target price, with the reasoning.
- Discount calculatorSale price and savings for any percentage off.
- Bundle discount calculatorBundle, BOGO and buy-X-get-Y prices per item.
FAQ
Questions, answered
Markup % = ((Retail - Cost) / Cost) * 100. Or if you have a target markup: Retail = Cost * (1 + Markup%/100). A $25 cost with 60% markup gives $25 * 1.60 = $40 retail.
Margin % = Markup / (100 + Markup) * 100. 50% markup = 33.3% margin. 100% markup = 50% margin. 200% markup = 66.7% margin. Margin is always smaller than the equivalent markup.
No. Markup is a pricing rule. Profit is what you actually keep. A product with 100% markup still loses money if your ad spend and fulfilment fees eat more than the markup provides. Always model full cost per order, not just product cost.
It depends on category and channel. High-velocity low-ticket items like groceries and basic apparel run on 20% to 60% markup. Premium and specialty items can support 200% or more. Subscription and digital products have near-infinite markup because variable cost is near zero. Benchmark against competitors in your category.
Inbound shipping from supplier to your warehouse - yes. That is part of landed cost. Outbound shipping to the customer - no, handle that separately as a shipping fee or free-shipping threshold. Mixing outbound shipping into markup makes comparisons across products confusing.
Charm pricing ($19.99 instead of $20) is unrelated to markup - it is a perception lever. First set the retail price with markup, then apply psychological pricing if it fits your brand. Try the psychological pricing tool next.
Prove the markup with real reviews
A fair markup does not sell itself. Real customer reviews do the convincing. WiserReview collects and displays verified reviews on every product page to lift conversion.
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