1. What is a Markup Calculator?

Definition: This calculator determines the markup rate between a product's cost price and selling price.

Purpose: It helps businesses and individuals understand their profit margins and pricing strategies.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( M \) — Markup rate (decimal)
• \( S \) — Selling price (USD)
• \( C \) — Cost price (USD)

Explanation: The difference between selling and cost price is divided by the cost price to determine the markup rate.

3. Importance of Markup Calculation

Details: Understanding markup helps businesses set profitable prices, analyze competitors' pricing, and maintain healthy profit margins.

4. Using the Calculator

Tips: Enter the selling price and cost price in USD. Both values must be greater than 0.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between markup and margin?
A: Markup is based on cost price, while margin is based on selling price. Markup shows how much more you charge than cost.

Q2: What's a typical markup rate?
A: Markup varies by industry. Retail often uses 50-100% markup (0.5-1.0 decimal), while services may use higher markups.

Q3: How do I convert markup to percentage?
A: Multiply the decimal markup by 100. Our calculator shows both formats.

Q4: Can markup be negative?
A: Yes, if selling price is below cost, but this means selling at a loss.

Q5: How does markup relate to profit?
A: Markup determines gross profit per unit before other expenses are considered.