The selling price calculator derives a recommended price from product cost and either a target profit margin or target markup. The two methods use different denominators and therefore produce different prices at the same percentage.
How to use this calculator
Enter product cost and select margin or markup. Margin is profit as a share of selling price; markup is profit as a share of cost. A 100% margin is mathematically invalid because it would require division by zero.
Formula & calculation method
Margin price = cost/(1 − margin/100); markup price = cost × (1 + markup/100)Expected profit is price minus cost. Margin pricing ensures the desired share of final revenue remains after the entered cost. Markup pricing adds the specified percentage directly to cost.
Worked example
For a cost of 60, a 40% markup produces a price of 84 and profit of 24. A 40% margin instead produces a price of 100, because 40 profit is 40% of the final selling price.
Why this is useful
The calculator makes pricing assumptions explicit and helps prevent accidentally using markup where a revenue-based margin was intended. Displaying expected profit provides a useful monetary check.
Limitations to keep in mind
Cost-based pricing alone does not measure customer demand, competition, taxes, discounts, or price elasticity. Ensure the entered cost includes all expenses you intend the price to cover.
Frequently asked questions
Which gives a higher price at the same percentage?
For positive percentages below 100%, margin pricing gives a higher price because the denominator is final revenue rather than cost.
Can markup exceed 100%?
Yes. A 150% markup means adding 1.5 times cost, producing a price of 2.5 times cost.
Why is 100% margin rejected?
Price would be cost divided by zero. A finite price with positive cost cannot yield a 100% margin.