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Enter your markup
information
To get started, enter two of the fields below and
we will automatically calculate the rest.

How to use Markup Calculator?

  1. Enter the cost of your product or service in the $ Cost field. This is your cost of goods sold.
  2. In the % Markup field, enter the percentage markup you want to apply. For example, enter 30 for a 30% markup.
  3. The calculator will automatically populate the % Margin, $ Revenue, and $ Profit fields.
  4. % Margin shows your profit margin percentage. Revenue shows the final selling price. Profit shows your total profit amount after markup.
  5. Test different markup percentages and see how they impact profit margin and revenue.
  6. You can also enter your target revenue or profit first, and the calculator will back-calculate the required markup percentage.
  7. Use these outputs to understand the relationship between markup, cost, revenue and profit. Easily evaluate different markup scenarios.

Stop Wasting Time Calculating Markups Manually

What is Markup?

Markup refers to the percentage difference between the cost of a product and its final selling price. It represents the profit margin added on top of the base cost of goods sold. For example, if a product costs you $100 to manufacture or purchase, and you sell it for $150, your markup rate is 50%. This means the selling price is 150% of the original cost. In other words, you have “marked up” the product by 50% from cost to arrive at the sales price. So in simple terms, markup is the amount added on top of cost to determine the retail or selling price. It directly contributes to your profit margin. Setting the right markup involves balancing profit goals with market competitiveness.

A Simple Formula to Calculate Markup Price

The formula to calculate markup is as follows:

Markup Price = Cost of Goods + (Cost of Goods * Markup Percentage)

where:

Cost of Goods = the cost of your contracting service

Markup Percentage = the desired profit expressed as a percentage of the cost of goods

For example, if your contracting services cost $100 and the desired markup percentage is 50%, the markup price would be
calculated as follows:

Markup Price = $100 + ($100 * 50%) = $100 + $50 = $150

So the final selling price of the product or service would be $150. Use this formula to determine the final selling price of the
services, taking into account the cost of goods and their desired profit.

Industry- Specific Markup Percentages

Here is the list of markup percentages based on industry-specific:

Between 10% – 35 %

Industries Markup
Percentages
CONSTRUCTION 10%-30%
LANDSCAPING 15%-30%
HANDYMAN 15%-35%
ELECTRICAL 15%-35%

Between 20% – 35 %

Industries Markup
Percentages
PAINTING 20%-35%
FLOORING 20%-35%
HVAC 20%-35%

Between 20% – 40 %

Industries Markup
Percentages
PLUMBING 20%-40%
ROOFING 20%-40%
CARPENTER 20%-40%

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Features of a Markup Calculator

01

It Helps Hit Profit Goals

The calculator outputs clearly show the projected profit from any given markup. This allows you to adjust percentages to reach your profitability goals. You can validate that your pricing aligns with financial objectives.

02

It Allows Testing Different Markups

Markup calculators make it easy to play with different markup scenarios and pricing alternatives. You can quickly see how various rates impact your profitability.

03

User-Friendly

Talking about usability, the calculator for markup has an easy learning curve. No matter if you are a beginner or experienced, you can use a markup calculator effortlessly.

04

Quick Results (No Waiting Time)

Rather than performing complex calculations by hand, you can instantly calculate recommended selling prices from any cost input and desired markup percentage. This streamlines your pricing process, freeing up time.

Benefits of Using a Markup Calculator

  • Efficiency gain: When calculating the percentage markup and final selling price, using a markup calculator saves time and eliminates the chances of human errors. As a result, contractors are left with ample time to stay focused on winning new jobs and improving services.
  • Improved accuracy: By making it simple for contractors to modify their markup % in response to changes in market conditions and other factors, markup calculators can aid in the development of a more efficient pricing strategy. Because of this, contractors may continue to be profitable and competitive in a changing market.
  • Better Pricing Strategy: Proper markup ensures you’re pricing your products or services accurately, maximizing profits while staying competitive. Not only does it enhance your business’s profitability, but it also builds trust with customers, ensuring they get value for their money.
  • Usability: Markup calculators are frequently user-friendly and simple to use, even for people with very little technical knowledge. This makes it simple for contractors to calculate the markup % and ultimate selling price of their services fast and without difficulty.
  • Cost-effective: Markup calculators are a cheap solution for contractors of all sizes because many of them are offered for free or at a modest price. As a result, contractors may quickly begin using markup calculators and reaping their benefits without having to spend a lot of money.

Tips for Setting Markup Percentages

  • Research Competitors:  Analyze how competitors price similar products, along with their expected profit margins. This provides a benchmark to remain competitive. Match or slightly undercut prices.
  • Factor in Uniqueness: Consider the product’s uniqueness, positioning, demand levels, and target consumer. More unique or high-demand products support higher markups.
  • Account for Other Costs: Be sure to factor in all ancillary costs beyond just manufacturing/purchasing, like shipping fees, packaging, taxes, and so on. Account for these in the base cost.
  • Evaluate Volume Discounts: At higher order volumes, bulk discounts often apply to lower COGS. Ensure your markup accommodates volume-based reductions in base cost.
  • Test Different Rates: Model different markup scenarios and price points to find the optimal balance of profitability and affordability. Experiment to see impact.

What is the difference Between Markup vs
Gross Profit Margin?

The basic difference between gross margin and markup is as follows:

Markup Gross Margin
The percentage added to the cost of the final service to make it a selling price. A percentage of total revenue exceeding the cost of goods sold.
It determines the final selling price
of the product.		 It determines the profitability of your
contracting business.
It denotes the percentage of the cost of your
contracting services.		 It denotes the percentage of your revenue.
Considering gross profit and cost of goods sold, markup offers the final selling price. Considering all the costs of your contracting business, the gross profit margin determines the overall profitability of your business.

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Frequently Asked Questions

  • Is the markup calculator free to use?

    Yes, you can use the markup calculator for free through InvoiceOwl.

  • What is the desired markup percentage?

    The amount by which the cost of your contracting service is increased to determine its selling price is known as the desired markup percentage. It is stated as a proportion of the price. For instance, the total cost would be $120 ($100 + $20) if a contractor had a $100 cost for a contracting service and wanted to add a 20% markup.

  • What’s the difference between markup and profit margin?

    The price at which the cost of a service is increased to determine its selling price is called markup. It is stated as a proportion of the price.

    The profit margin is the sum of money your contracting business makes after deducting the cost from the selling price. It is stated in percentages of the selling price. You can also say sales price minus the cost of goods sold

  • What is the markup formula?

    The markup formula is used to understand how much your contracting service’s cost is increased to establish its selling price. The markup formula is as follows:

    (Selling Price – Cost) / Cost = markup

    Where:

    • Selling price = The final cost of your contracting service.
      Cost = price of service before adding profit
    • If you want the markup percentage in decimal form, make sure you divide the markup % by 100. For instance, 0.20 would be the decimal equivalent of a markup percentage of 20%.
    • The selling price can then be determined using the following formula:
    • Cost + Selling Price (Cost x Markup)
    • This markup formula calculates the amount by which the cost is increased to get to the selling price by multiplying the cost of the good or service by the markup.

  • What is markup by specific industries?

    Markup percentages may differ depending on the industry and the services being offered. Since each contracting business determines its own markup percentages based on criteria including material, labor, overheads, and desired profit margins, there are no established industry standards for markup.

  • How accurate are markup calculator results?

    The accuracy of the markup calculator depends on the accuracy of the data inserted. The accuracy of the result depends entirely on the information fed into the calculator. However, the calculator’s result will be inaccurate if the cost added is inaccurate.

  • Can I use a markup calculator for all types of contracting services?

    Yes, it is possible if the markup calculator covers all the costs related to your contracting services. A wide range of contracting services, including but not limited to construction, electrical work, plumbing, HVAC, and painting, can be calculated using markup tools.

  • Are there any limitations to using a markup calculator?

    Yes, there are quite a few limitations:

    • Accuracy of data: Offers results depending on what you feed in.
    • Restricted scope: Limited to the costs fed in the calculator, no other costs would be counted.
    • Competitive market: Competitions could hinder markup calculator estimations.

  • Is there any free invoice maker?

    Yes, there are free invoice makers available, but which one to choose is a difficult question. We suggest trying InvoiceOwl’s invoice generator to create invoices for your clients. The tool is quick and offers several customization options to give your invoice a professional look.

  • Which Invoice template should I use?

    When it comes to choosing an invoice template, you must use Excel and Word files. These are simple and detailed since they have all the necessary fields that one needs to create an in-depth invoice. Plus, these are widely used by freelancers and small business owners.

  • Are there free invoice templates?

    Yes, there are free invoice templates available online. But these invoice templates come with pros and cons. Easily accessible and free to download are favorable points, while no customization and manual are difficult jobs to perform.

  • What are the Most Popular Types of Invoices?

    There are six different and popular invoice types are

    • Proforma invoice
    • Sales invoice
    • Recurring Invoices
    • Interim Invoices
    • Final Invoices
    • Past-Due Invoices

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