Markup and Selling Price Calculator

1. Enter the product or service's unit cost, including shipping and packaging.
2. Enter variable expenses (taxes, commissions, and fees), your share of fixed expenses, and your desired profit, all as a percentage of the selling price.
3. See the suggested price, markup, and how each dollar from the sale is allocated. You can also compare it with your current price.

Markup divisor: the formula that protects your profit

The most common mistake is adding a percentage to the cost: $50 cost + 40% = $70. But taxes, card processing fees, and commissions are charged on the selling price, not the cost. The right approach is the markup divisor: price = cost ÷ (1 − variable expenses − fixed expenses − profit). With a $50 cost and a total of 40%, the price is $83.33—not $70.

• Markup multiplier: 1 ÷ (1 − total percentages). At 40%, that's 1.667—multiply any cost by it.
• Margin: calculated from the selling price; markup is the factor applied to the cost. A 40% margin equals a markup of 1.667.

What to enter in each field

• Variable expenses: sales tax, payment processing fees (2% to 5%), marketplace commission (10% to 20%), and sales commissions.
• Fixed expenses: add up monthly rent, salaries, owner compensation, accounting, and internet costs, then divide by your average monthly revenue.
• Profit: what's left after expenses for you to reinvest or take out. To estimate your taxes, use the tax calculator.