Calculate business markup and pricing
Standard markups vary: Retail 50-100%, Food service 200-300%, Jewelry 100-300%, Electronics 30-50%. Consider competition, perceived value, and all costs including overhead.
Price = Cost ÷ (1 - Target Margin). For 40% margin on ₹60 cost: ₹60 ÷ 0.60 = ₹100 selling price. This ensures the margin, not markup, meets your goal.
Cost-plus ensures profit on each item. Value-based prices based on customer perceived value—potentially higher profits but requires market research. Most businesses use a combination.
Calculate overhead per unit: Total monthly overhead ÷ Units sold. Add this to direct cost before applying markup. This ensures all costs are covered, not just direct material costs.
Keystone pricing means doubling the wholesale cost (100% markup = 50% margin). It's a simple rule of thumb in retail but may not suit all products or market conditions.
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