Markup vs margin: how to price wholesale products for your store
Markup is profit as a percentage of cost; margin is profit as a percentage of the selling price. A 50% markup is only a 33% margin, and mixing the two up is one of the most common pricing mistakes.
The two formulas
| Formula | Example: cost 10.00, price 15.00 | |
|---|---|---|
| Markup | (price − cost) ÷ cost | 5 ÷ 10 = 50% |
| Gross margin | (price − cost) ÷ price | 5 ÷ 15 = 33.3% |
| Price from markup | cost × (1 + markup) | 10 × 1.5 = 15.00 |
| Price from margin | cost ÷ (1 − margin) | 10 ÷ (1 − 0.333) = 15.00 |
To convert between them: margin = markup ÷ (1 + markup), and markup = margin ÷ (1 − margin).
Markup to margin conversion table
| Markup | Gross margin | Price for a cost of 10.00 |
|---|---|---|
| 25% | 20.0% | 12.50 |
| 40% | 28.6% | 14.00 |
| 50% | 33.3% | 15.00 |
| 60% | 37.5% | 16.00 |
| 75% | 42.9% | 17.50 |
| 100% | 50.0% | 20.00 |
| 150% | 60.0% | 25.00 |
| 200% | 66.7% | 30.00 |
And the other way round, for common margin targets:
| Target margin | Markup needed |
|---|---|
| 20% | 25% |
| 30% | 42.9% |
| 40% | 66.7% |
| 50% | 100% |
| 60% | 150% |
Keystone pricing
“Keystone” means doubling the wholesale cost: a 100% markup, which is a 50% gross margin. It is a common starting point in retail, and supplier recommended retail prices are often close to it. Treat it as a reference, not a rule: fast-moving, price-compared items often sell below keystone, while unique or low-volume items can sit well above.
What the margin has to cover
Gross margin is before your other costs. From each sale you still pay payment processing, platform or app fees, packaging, the part of shipping you don’t charge for, returns and advertising. A 30% gross margin can shrink to a few percent once those are paid, so calculate them for a typical order before you settle on a markup.
Currency conversion and price endings
When your supplier invoices in another currency, convert first, then apply the markup: selling price = supplier cost × exchange rate × (1 + markup). Use a rate that reflects what you will actually pay, including your bank’s spread, and revisit prices when the rate moves.
Rounding comes last. A .99 ending rounds each price up to the next .99, which adds a little margin: 14.00 becomes 14.99 and 13.77 becomes 13.99.
| Supplier cost | Rate (example) | Converted | Markup 60% | Rounded to .99 |
|---|---|---|---|---|
| ₺400.00 | 0.025 | 10.00 | 16.00 | 16.99 |
| €8.50 | 1.08 | 9.18 | 14.69 | 14.99 |
The rates are examples only.
Applying a markup to a whole catalog
For a supplier price list with hundreds of rows, apply the markup with a formula column in your spreadsheet, or let Sheet2Store do it during conversion: it applies your markup to each supplier cost, converts with the exchange rate you enter and confirm, optionally rounds up to .99, and keeps the supplier cost next to the selling price in the review Excel file. A cost of 100 with a 40% markup becomes 140.
Frequently asked questions
Is a 50% markup the same as a 50% margin?
No. A 50% markup gives a 33.3% margin. A 50% margin needs a 100% markup.
Which should I use to set prices?
Many retailers price with markup because it is applied to cost, and check profitability with margin. The important thing is to know which one you are using.
Can margin be more than 100%?
No. Margin is a share of the selling price, so it stays below 100%. Markup has no upper limit.
Does Shopify calculate margin?
If you enter Cost per item, Shopify shows the profit and margin for the variant in the admin.
Turn a supplier file into an import-ready CSV
Upload a supplier PDF, Excel or CSV price list. Map the columns, set your markup, fix flagged rows and download a Shopify or WooCommerce CSV. The first five rows are free to preview.