Use this free markup calculator to see your product markup, gross margin, and profit per unit. Built for Shopify merchants in supplements, beauty, CBD, and pet brands. Enter your cost and price, pick your industry, and see how your markup compares to the median brand in your category.

How to use this markup calculator

1. Enter your product cost

Your cost of goods sold (COGS) per unit. This is what you pay your supplier or manufacturer, including any per-unit freight or packaging. If you make products in-house, include ingredient and labor cost per unit.

2. Enter your selling price

The price customers pay on your Shopify store. If you run a subscribe-and-save program, use the subscription price since that is what most repeat customers pay.

3. Pick your industry

The calculator pulls a median markup range for each vertical. Supplement brands run much higher markups than apparel, which run much higher than electronics. The benchmark message uses your pick.

4. (Optional) Add your refund rate

If 5% of your orders get refunded, your effective markup drops. The calculator shows what your markup really is after refund erosion. Beauty and supplement brands often see 8 to 15% refund rates, which can quietly shave 20 to 40 percentage points off your markup.

5. Read the benchmark message

The calculator tells you whether your markup is below, within, or above typical for your vertical. It does not tell you to change anything. Pricing decisions depend on brand positioning, volume, and what your store can defend.

What is markup?

Markup is the percentage you add to the cost of a product to arrive at the selling price. A product that costs $10 and sells for $25 has a 150% markup. Markup is calculated from cost up, which is what makes it different from margin.

Markup is the language suppliers, wholesalers, and founder-operators use when setting prices. Margin is the language your accountant uses when looking at the P&L. Both numbers describe the same transaction from different angles.

For most Shopify founders, markup is the right framework when pricing a new product ("what percentage on top of COGS is fair?"). Margin is the right framework when looking at overall store profitability ("what percentage of revenue is profit?"). Investopedia has a clear breakdown of the technical difference.

Markup formula explained

The markup formula:

Markup % = ((Selling Price - Cost) / Cost) × 100

Variables:

• Selling Price: what you charge on your storefront, before tax and shipping
• Cost: your landed COGS per unit
• Markup: the percentage added to cost to get to selling price

Worked example: cost $10, price $25.

• Markup = (($25 − $10) / $10) × 100 = 150%
• Margin = (($25 − $10) / $25) × 100 = 60%
• Profit per unit = $25 − $10 = $15

Notice the gap between markup and margin. A 150% markup is a 60% margin. A 100% markup is a 50% margin. A 50% markup is a 33% margin. This is where founders get tripped up - someone says "we run 40% margins" and you mentally translate that to a 40% markup, when it is actually a 67% markup. The two are not interchangeable.

Example calculations

Three realistic Shopify merchant scenarios:

The supplement and beauty markups above are typical for DTC brands with some brand equity. Pet brands run lower because the category has more price-comparison shopping and thinner retail spreads. A supplement store running a 128% markup is underpricing; a pet brand running 340% is probably pricing itself out of the mainstream.

Why markup matters for Shopify merchants

Most Shopify founders underprice, especially in the first 6 to 12 months. They look at competitor prices, undercut by 10%, and build a business that cannot afford its own support, marketing, or logistics costs.

Your markup is the budget for everything else. Marketing, returns, shipping, customer support - all of it comes out of the gap between your cost and your price. If you are running a 60% markup (37% margin), you have $6 of room on a $16 product to cover fulfillment, returns, Meta ads, and support. That is not enough room to grow.

At 250% markup (71% margin), the same $16 product leaves $11 of room. Suddenly you can afford real customer acquisition, a returns program that does not nickel-and-dime customers, and phone support for the callers who would otherwise ghost or refund.

That last point is where Ringly fits. Phone support used to be a feature of brands with premium markups because it required human agents at $18 to $25 per hour. At $1,500 per month for a small team, most stores with sub-100% markups skipped it. AI phone agents break that math. Ringly handles inbound calls 24/7 for $349/mo on the Grow plan, which means even a 75% markup store can afford to actually answer the phone. Stores using AI phone support for Shopify typically see 5 to 15% uplift on recovered revenue from calls that would have ended in silent abandonment or a refund.

The refund-aware calculator above is important for high-AOV categories. If you sell $150 skincare kits with a 12% refund rate, your effective markup is lower than you think. Before discounting further or cutting costs, check that number - it often tells a different story than the gross markup. Our deeper breakdown of customer service cost per ticket shows how response time compounds this problem.

Start a 14-day free trial of Ringly to see how AI phone support changes your markup math.

Frequently asked questions

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