Initial Markup Calculator
IMU on retail, and the same figure on cost.
Calculate initial markup as a percentage of retail and of cost, with the multiplier, so buying and workshop conventions can be compared.
Initial markup on retail
60.0%
150.0% on cost · 2.50× multiplier
Retail buying quotes markup on the retail price; suppliers and workshops quote it on cost. Both figures are shown because the two conventions collide constantly — a "50% markup" means doubling in one and multiplying by 1.5 in the other. Markup on retail is arithmetically the same as gross margin percentage.
How the Initial Markup Calculator works
Retail buying quotes markup as a percentage of the retail price; workshops and suppliers quote it as a percentage of cost. A 50% markup means doubling in one convention and multiplying by 1.5 in the other, and the two collide in conversations constantly. This shows both figures for the same pair of numbers.
Also known as: IMU calculator · retail markup calculator
Two conventions that constantly collide
Retail buying quotes markup as a percentage of the retail price: (retail − cost) ÷ retail. Suppliers, workshops and most small makers quote it as a percentage of cost: (retail − cost) ÷ cost. The same pair of prices produces two very different numbers.
An item costing 20 and retailing at 50 has a 60% markup on retail and a 150% markup on cost. Both describe the same 2.5× multiplier. A conversation where one party means one and the other means the other goes wrong quickly and quietly.
Markup on retail is arithmetically identical to gross margin percentage, which is why retail planning uses it — the same number serves both purposes and everything in the plan stays in the same units.
A worked example
A supplier offers a garment at 20 and suggests a '50% markup'. On their convention that means 30 retail; on the buying convention it means 40. The difference is a third of the retail price and the whole of the argument.
Working from a target instead: to achieve a 60% initial markup on a 20 cost, the retail is cost ÷ (1 − 0.60), which is 50. Dividing rather than multiplying is the shape that catches people, and it is the same reverse-percentage form as VAT and payment fees.
Where the answer misleads
Initial markup is a plan, not an outcome. It describes the margin at full price, before a single markdown, and in fashion apparel very little sells at full price. The maintained markup is the number that pays the rent.
Setting initial markup high to absorb expected markdowns tends to be self-defeating: a price the market reads as too high sells more slowly, which generates the markdowns the high price was meant to cover.
Finally, markup says nothing about volume. A high markup on something that does not sell is worth less than a modest one on something that does, and the calculation cannot see the difference.
Not financial advice. Marketplace fees change, and they vary by country, plan and seller status. Every rate here is an editable default, not a quoted price, check the platform's current fee schedule before you price a product against it. This is not tax or business advice.
Frequently asked questions
What is initial markup?
The difference between retail and cost, as a percentage of retail: (retail − cost) ÷ retail. An item costing 20 and retailing at 50 has a 60% initial markup, and it is the planned margin before any markdown happens.
Why is markup calculated on retail rather than cost?
Because retail planning is built on sales value — sales, stock and markdowns are all held at retail — so a markup on the same base is directly comparable. Suppliers work from cost, which is why their percentages look so different.
What markup should I plan for?
Enough to survive the markdowns you expect. If a category typically takes 30% markdowns, an initial markup that leaves an acceptable margin only at full price is a plan to lose money in week ten.
Is markup the same as margin?
Initial markup on retail is arithmetically the same as gross margin percentage. The confusion is entirely with markup on cost, which is always a larger number for the same pair of prices.