Retail Markup, Margin & Break-Even Calculator, Australia

Markup is the percentage you ADD to cost. Margin is the percentage of the SALE PRICE that is profit. A 100% markup means doubling cost, but that's only a 50% margin. A 50% margin means doubling cost, same outcome as 100% markup. The shortcut: margin = markup / (1 + markup). Many retailers confuse the two and price too low, the calculator lets you toggle between the two views so the conversion is explicit.

Keystone is the retail-industry shorthand for doubling cost, a 100% markup, 50% margin. It's still the default in mainstream fashion, homewares, and gift retail because it builds in enough margin to absorb markdowns, theft, and returns while leaving real profit. Specialty food, hardware, and electronics typically run lower (1.4 to 1.7× for food, 1.15 to 1.30× for consumer electronics) because turn rates are higher or competition is fiercer.

Most retail goods attract 10% GST. Australian Consumer Law requires displayed prices to be GST-inclusive (the 'single-price' rule), so your $50 shelf tag must already include $4.55 of GST, leaving $45.45 ex-GST as the sale value. The calculator shows both ex-GST and GST-inclusive prices: the inc-GST figure is what goes on the shelf; the ex-GST is what flows into your accounting system as revenue.

Three levers: (1) re-quote suppliers quarterly, many SMEs accept cost increases passively when 5-minute calls would surface alternatives; (2) raise prices in defensible increments (under-2% changes often go unnoticed; over-5% need messaging); (3) tighten markdown discipline so you don't compound margin loss on slow-movers. The calculator lets you model the volume needed to absorb a cost increase without a price rise, usually surprising.

Break-even units = monthly fixed costs ÷ unit gross margin. Fixed costs include rent, staff wages, utilities, insurance, software, and a depreciation allowance for fit-out. Unit gross margin is sale price minus unit COGS. The calculator does the math, but the harder part is realistic fixed costs, most new retailers under-estimate non-rent fixed costs by 30% to 50%. Add a 20% buffer to your fixed-cost line before relying on the volume number.

Manufacturer's Suggested Retail Price (MSRP) and Recommended Retail Price (RRP) are functionally identical in AU, the supplier's suggested shelf price. Neither is binding; retailers can price above or below. Misrepresenting an RRP as the 'usual price' when it wasn't is misleading conduct under ACL, particularly with comparison advertising. Use 'was/now' pricing only if the higher price was genuinely the recent selling price (ACCC guidance: 'reasonable period' interpreted broadly).