Retail lives on markup — but survives on margin. Keystone pricing (doubling wholesale cost) is the traditional floor for independent shops: a 100% markup, which is a 50% margin before rent. Gift and specialty often run higher; groceries and hardware run far lower and make it up in turns.
The number that matters after the price is set is the markdown math: a 20%-off sale needs roughly 1.5× the units to hold profit. Price the shelf so that the discount you'll eventually run still pays the rent.
| Wholesale | Keystone price | Margin |
|---|---|---|
| $5 | $10 | 50% |
| $12 | $24 | 50% |
| $25 | $50 | 50% |
Keep going with these tools — they build on this calculation: Food Cost Percentage Calculator, Restaurant Profit Margin Calculator, Restaurant Break-Even Calculator and Menu Pricing Calculator. When your prices look right, print the menu with the Menu Maker — free templates, PDF & PNG. Want us to set the whole system up for you? Ask about concierge setup.
Keystone (100% markup, 50% margin) is the traditional starting point for gifts, décor and apparel. Convenience and grocery categories run 15–35% margins and survive on volume — know your category before you set the percentage.
Because margin compares profit to the price, not the cost. Doubling a $10 cost makes $10 profit on a $20 price — 100% markup, 50% margin. Every percentage point of margin needs more than two points of markup as costs rise.
A 50%-margin item survives a 20% discount only if volume rises about 67%. Check the margin first, the volume second — most clearance loses money twice: once on the discount, once on the space it holds.