How does cost-plus pricing work?

You add a fixed markup percentage to your unit cost. Selling price = cost × (1 + markup ÷ 100). A cost of 50 with a 40% markup gives a price of 70.

Why is the margin lower than the markup?

Markup is measured against cost while margin is measured against the higher selling price, so the margin percentage is always smaller. A 40% markup on cost equals a 28.57% margin.

What markup do I need for a 50% margin?

A 100% markup. Margin and markup are not the same — to hit a 50% margin you must double the cost, since margin is measured against the selling price while markup is measured against cost.

When is cost-plus pricing a good choice?

It works well when costs are predictable and you want a guaranteed profit per unit — common in manufacturing, retail and contracting. It ignores demand and competition, so pair it with market checks for price-sensitive products.

Is anything uploaded?

No — the calculation runs entirely in your browser and no data leaves your device.

Cost-Plus Pricing Calculator

Cost-plus pricing is the simplest way to set a selling price: take your unit cost and add a fixed markup percentage on top. This calculator returns the selling price, the profit per unit and the resulting profit margin, so you can price products and services with a guaranteed return. It also makes the markup-versus-margin distinction clear, which trips up many sellers.

How it works

The selling price adds the markup to the cost:

profit = cost × (markup ÷ 100) selling price = cost + profit

The margin is then the profit as a share of the selling price, not the cost:

margin = (profit ÷ selling price) × 100

Because the margin’s denominator is the larger selling price, the margin percentage is always smaller than the markup percentage.

Example

A unit cost of 50 with a 40% markup:

profit = 50 × 0.40 = 20 selling price = 50 + 20 = 70 margin = 20 ÷ 70 × 100 ≈ 28.57%

So a 40% markup on cost yields a 28.57% margin on the sale price. Remember that a markup measured against cost always converts to a smaller margin against the selling price. Everything stays in your browser.