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Dallas McLaughlin Digital Marketing

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Markup Calculator

The Markup Calculator takes your product cost and selling price to calculate markup percentage — a foundational input for setting profitable ROAS targets in paid media campaigns.

Enter your product cost and your selling price to calculate the markup percentage above cost.

About Markup Calculator

Markup is the percentage added above the cost of a product or service to arrive at the selling price. It is a fundamental business metric that paid media buyers need to understand because it directly informs what ROAS target is commercially viable.

The formula: ((Selling Price − Cost) ÷ Cost) × 100 = Markup %. A product that costs $40 and sells for $60 carries a markup of 50%.

It is important not to confuse markup with margin. Markup is calculated as a percentage of cost; margin is calculated as a percentage of revenue. A 50% markup does not equal a 50% margin — the same $40 cost / $60 price example yields a gross margin of 33.3%. These two numbers are related but not interchangeable, and conflating them leads to ROAS targets that underestimate the cost of advertising.

Media buyers use markup data when reverse-engineering minimum ROAS requirements. If a product is sold at a 60% markup but carries fulfillment, platform fees, and return costs, the effective margin available to absorb ad spend is narrower than the markup percentage implies. Understanding markup is the starting point for a more complete profitability analysis.

For e-commerce advertisers in particular, tracking markup at the product or category level — rather than across an entire catalog average — can reveal which campaigns are actually driving profitable purchases and which are generating revenue at unsustainable cost structures.

Pair this tool with the Margin Calculator and ROAS Calculator to build a full picture of campaign profitability.

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Paid Media Metrics: Key Terms, Formulas, and Definitions

Spend
Spend is the net advertising cost - the hard cost of media only. This does not include management fees, creative production, or any other service fees.
Impressions
Impressions are the number of times an ad was shown in a given channel - the total volume of ad views delivered by the advertising spend.
Cost-per-thousand Impressions (CPM)
CPM is the cost of purchasing 1,000 impressions. It is the standard buying metric for display, programmatic, and streaming TV advertising. Formula: (Spend ÷ Impressions) × 1,000 = CPM
Click-through Rate (CTR)
CTR is the rate at which impressions result in a click. If 1,000 ads are shown and 10 people click, the CTR is 1%. Formula: Clicks ÷ Impressions = CTR
Clicks
Clicks are the total number of times an ad was clicked. The click metric is also commonly used as a proxy for website sessions driven by paid advertising.
Cost-per-click (CPC)
CPC is the average advertising cost paid per click. Formula: Spend ÷ Clicks = CPC
Conversions
Conversions are the total number of desired actions - sales, leads, form submissions, downloads, or other defined goals - attributed to the advertising spend.
Conversion Rate
Conversion rate is the percentage of clicks that result in a conversion action - a lead, purchase, download, or other defined goal. Formula: Conversions ÷ Clicks = Conversion Rate
Cost-per-acquisition (CPA)
Cost-per-acquisition (CPA), also called cost-per-conversion, is the average amount of advertising spend required to generate one conversion action. Formula: Spend ÷ Conversions = CPA
Return on Ad Spend (ROAS)
ROAS measures how much revenue is generated per dollar of advertising spend. A 4x ROAS means $4 in revenue for every $1 spent - but profitability depends on your margin. Formula: Revenue ÷ Spend = ROAS
Markup
Markup is the percentage added above the cost of a product to arrive at the selling price. It is calculated relative to cost, not revenue - which is the key distinction between markup and margin. Formula: (Selling Price − Cost) ÷ Cost = Markup %
Margin
Gross margin is the percentage of revenue retained after deducting the cost of goods sold. Unlike markup (which is based on cost), margin is calculated relative to revenue - the number that ties directly to advertising profitability targets. Formula: (Revenue − Cost) ÷ Revenue = Margin %
Revenue
Revenue is the total income generated from sales before any costs are deducted. In paid media analysis, revenue attributed to advertising spend is the numerator in ROAS calculations.
Budget
Budget is the total advertising spend allocated to a campaign or channel for a defined period. Budget planning typically begins with a target CPA or ROAS and works backward from desired conversion volume.

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