Cost-Plus Pricing Calculator
Calculate your selling price by adding a target markup to your total cost. The most straightforward pricing method — useful for product pricing, manufacturing, and wholesale to retail pricing.
💰 Pricing💼 Selling Price = Total Cost × (1 + Markup%)
Cost per unit ($)
Target markup percentage (%)
Units to produce or sell
Please enter valid values.
Formula & Reference
| Variable | Formula | Units |
|---|---|---|
| Cost-Plus Pricing Calculator | Selling Price = Total Cost × (1 + Markup%) | $/unit |
Step-by-Step Examples
Example 1
Physical Product
$25 cost, 50% markup.
- Price = $25 × 1.50 = $37.50
- Profit/unit: $12.50
- Gross margin: 33.3% (margin ≠ markup!)
✓ $37.50 selling price, 33.3% margin
Example 2
Wholesale to Retail
Manufacturer cost $10, 100% wholesale markup, retailer 100% retail markup.
- Wholesale: $10 × 2 = $20
- Retail: $20 × 2 = $40
- Consumer pays $40 for a $10 cost item
- This is standard retail channel math
✓ $40 retail from $10 cost via 2-step markup
Example 3
Service Package
$500 cost (labour + overhead), 40% markup.
- Price = $500 × 1.40 = $700
- Profit: $200 per package
- Margin: 28.6%
✓ $700 price, $200 profit per package
Real-World Applications
Manufacturing
Standard method for pricing physical goods from production cost.
Retail
Retailers apply markup to wholesale cost to set shelf prices.
Wholesale
Distributors use cost-plus to price between manufacturer and retailer.
Service Businesses
Apply markup to labour + overhead cost to price service packages.
Common Mistakes to Avoid
⚠️
Confusing markup and margin
50% markup ≠ 50% margin. Markup is profit/cost; margin is profit/price. A 50% markup = 33.3% gross margin. These are very different numbers.
⚠️
Not including overhead in cost
Unit cost must include allocated overhead (rent, admin, software, insurance), not just materials and direct labour.
⚠️
Ignoring market pricing
Cost-plus ignores what customers are willing to pay. You may leave money on the table if the market supports higher prices.
Frequently Asked Questions
What is the difference between markup and margin? ▾
Markup = profit ÷ cost. Margin = profit ÷ price. 50% markup: cost $10, price $15, margin 33.3%. 50% margin: cost $10, price $20, markup 100%.
What markup is standard in retail? ▾
Varies widely: 50–100% for general consumer products, 100–300% for clothing and accessories, 50–80% for electronics, 200–500% for restaurants (food cost percentage).
When should I use cost-plus vs value-based pricing? ▾
Cost-plus: when costs are well-defined and competition is price-driven (commodities). Value-based: when you can quantify unique value delivered or benefit to the buyer.
How do I set markup for services? ▾
Add up all direct costs (labour at loaded rate, software, subcontractors) plus allocated overhead per project, then apply 20–40% markup for profit.
What's a healthy gross margin for products? ▾
50%+ for direct-to-consumer physical products. 30–50% for wholesale. Under 30% for high-volume/low-margin businesses. Software: 70–90%.