Turn your unit cost into a retail price that hits the margin or markup you want.
Enter what one unit costs you, then the margin or markup you want.
What you pay for one unit, such as the wholesale price.
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Enter your values to see the result.
Start with your unit cost — what you pay for one item, including any shipping to get it to you. Then decide whether you are pricing to a profit margin (profit as a share of the selling price) or a markup (profit as a share of the cost).
Retail price = cost ÷ (1 − margin ÷ 100)
Retail price = cost × (1 + markup ÷ 100)
For a 40% margin, the retail price is $12.00 ÷ 0.6 = $20.00, with $8.00 profit per unit.
A 40% markup gives only $16.80, because markup is measured on the smaller cost figure. That price is a 28.57% margin.
| Target margin | Retail price | Profit | Markup |
|---|---|---|---|
| 20% | $15.00 | $3.00 | 25% |
| 30% | $17.14 | $5.14 | 42.83% |
| 40% | $20.00 | $8.00 | 66.67% |
| 50% | $24.00 | $12.00 | 100% |
| 60% | $30.00 | $18.00 | 150% |
Retail prices for common unit costs at a 30%, 40% and 50% margin. A 50% margin is the same as keystone pricing (double the cost).
| Unit cost | 30% margin | 40% margin | 50% margin |
|---|---|---|---|
| $5.00 | $7.14 | $8.33 | $10.00 |
| $10.00 | $14.29 | $16.67 | $20.00 |
| $25.00 | $35.71 | $41.67 | $50.00 |
| $50.00 | $71.43 | $83.33 | $100.00 |
| $100.00 | $142.86 | $166.67 | $200.00 |
Divide the cost by 1 minus the margin as a decimal. For a $25.00 cost and a 35% margin: $25.00 ÷ 0.65 = $38.46, which leaves $13.46 profit. Don’t just add the margin percentage to the cost — that is a markup and gives a lower price.
Work backward: multiply the retail price by 1 minus your margin. To sell at $50.00 with a 40% margin, your unit cost can be at most $50.00 × 0.6 = $30.00.
Keystone pricing means setting the retail price at double the wholesale cost. That is a 100% markup, or a 50% margin.
Yes, if you pay them for every unit. Inbound shipping, packaging and per-sale platform fees all reduce your real profit, so add them to the unit cost before you price.
Both use the same profit, but margin divides it by the selling price and markup divides it by the lower cost. A positive markup always converts to a smaller margin.
It is the price that meets your own margin. Check competitor prices and any price the manufacturer recommends before you settle on it.
