# Vendor Markup Calculator

Calculate vendor markup percentage and profit margin. Compare wholesale to retail pricing and find total profit on units sold.

## What this calculates

Calculate the markup percentage between what you pay a vendor and what you charge customers. Enter your wholesale cost and retail price to see the markup, margin, and total profit across all units sold.

## Inputs

- **Wholesale / Vendor Cost** ($) — min 0 — The price you pay the vendor or manufacturer per unit.
- **Retail / Selling Price** ($) — min 0 — The price you charge customers.
- **Units Sold** — min 0 — Number of units sold (for total profit calculation).

## Outputs

- **Markup Percentage** — formatted as percentage — Retail price increase as a percentage of wholesale cost.
- **Profit Margin** — formatted as percentage — Profit as a percentage of the retail price.
- **Profit per Unit** — formatted as currency — Dollar profit on each unit sold.
- **Total Revenue** — formatted as currency — Total sales revenue from all units.
- **Total Cost** — formatted as currency — Total wholesale cost for all units.
- **Total Gross Profit** — formatted as currency — Total profit from all units sold.

## Details

Vendor markup is the percentage increase from the wholesale cost (what you pay) to the retail price (what you charge). If you buy a product for $25 wholesale and sell it for $50 retail, your markup is 100% and your profit margin is 50%.

The formulas are:
- **Markup = (Retail - Wholesale) / Wholesale x 100%**
- **Margin = (Retail - Wholesale) / Retail x 100%**

Markup and margin are related but different. A 100% markup always equals a 50% margin. A 50% markup equals a 33.3% margin. Vendors and buyers typically talk in terms of markup (based on cost), while accountants and investors talk in terms of margin (based on selling price).

Common vendor markup ranges by industry:
- **Grocery:** 5-25% markup
- **Clothing:** 50-100% markup (keystone pricing = 100%)
- **Electronics:** 10-30% markup
- **Jewelry:** 50-100%+ markup
- **Restaurant food:** 200-400% markup
- **Retail furniture:** 80-120% markup

The right markup depends on your overhead costs, competitive landscape, and volume. Low-margin businesses (like groceries) survive on high volume, while high-margin businesses (like jewelry) can operate with fewer sales.

## Frequently Asked Questions

**Q: What is keystone pricing?**

A: Keystone pricing means doubling the wholesale cost to set the retail price, which is a 100% markup (and 50% margin). If you buy a product for $25, the keystone price is $50. This is a common starting point in retail, especially for clothing, accessories, and gift shops. Some retailers use double keystone (150%+ markup) for slow-moving inventory or triple keystone for specialty items.

**Q: How do I calculate the wholesale cost from the retail price?**

A: Divide the retail price by (1 + markup percentage as a decimal). For a $50 item with a 100% markup: $50 / (1 + 1.00) = $25 wholesale cost. Alternatively, if you know the margin: Wholesale = Retail x (1 - Margin). For a $50 item with 50% margin: $50 x (1 - 0.50) = $25. Both methods give the same result because 100% markup and 50% margin are equivalent.

**Q: What is the difference between vendor markup and retailer markup?**

A: Vendor markup is what the vendor adds to their production cost before selling to you (the retailer). Retailer markup is what you add to the vendor's price before selling to the consumer. Products often go through multiple markups in the supply chain: manufacturer to distributor (20-40%), distributor to retailer (15-30%), and retailer to consumer (50-100%). Each party adds their own markup to cover costs and profit.

**Q: Does markup include overhead costs?**

A: Markup is typically calculated on the direct product cost (what you pay the vendor) and does not directly include overhead like rent, labor, and utilities. Your markup needs to be high enough to cover not just the product cost but also these overhead expenses. That is why the gross margin from markup is always higher than your net margin. A product with 50% gross margin might only yield 10-15% net margin after all expenses are accounted for.

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Source: https://vastcalc.com/calculators/finance/vendor-markup
Category: Finance
Last updated: 2026-04-08