Keystone Pricing Calculator
Keystone pricing is the traditional retail markup method where the retail price is set at double the wholesale cost, resulting in a 100% markup and a 50% gross margin. It was developed to cover typical retail overhead (rent, staff, shrinkage) while leaving a reasonable profit margin. Although online retailers have lower overhead, keystone remains a common starting point for product pricing. This calculator shows the keystone price, the margin at keystone, and lets you enter a custom retail price to compare the resulting margin against keystone.
Keystone pricing formula
Keystone Price = Wholesale Cost * 2 Gross Margin = (Retail - Cost) / Retail * 100 Markup = (Retail - Cost) / Cost * 100
At keystone: Retail = 2 * Cost, Margin = 50%, Markup = 100%. These three statements are equivalent for keystone pricing.
Above and below keystone pricing
- Above keystone (super-keystone): used for unique, branded, or low-competition products where demand supports premium pricing.
- Below keystone: sometimes necessary for high-volume commodities or when competing in price-sensitive categories. Ensure you still cover overhead before going below keystone.
- In dropshipping and low-margin ecommerce, keystone is often insufficient after platform fees. Use the custom retail price field to model pricing that achieves your target margin after all costs.
- Track margin by SKU: products priced above keystone subsidize those below and reveal which items to prioritize or discontinue.
Keystone pricing: frequently asked questions
What is keystone pricing?
Keystone pricing is a retail pricing method where the retail price is set at exactly twice the wholesale cost, resulting in a 100% markup and a 50% gross margin. For example, an item with a $25 wholesale cost would be priced at $50 retail.
What is the difference between markup and margin?
Markup is calculated on cost: a 100% markup means the retail price is 100% above cost (double the cost). Margin is calculated on the retail price: a 50% margin means gross profit is 50% of the retail price. Keystone pricing always produces 100% markup and 50% margin.
Is keystone pricing always appropriate?
Not always. Keystone is a starting benchmark, not a rule. High-demand or exclusive products can support higher than keystone pricing. Commodities with low perceived differentiation may need below-keystone pricing to compete. Use keystone as a floor, not a ceiling.
How do I apply keystone pricing in ecommerce?
In ecommerce, factor in platform fees (3 to 15% on Shopify, Amazon, Etsy), payment processing (2 to 3%), and return rates before setting price. You may need to price above keystone to achieve a 50% gross margin after these costs.
Can I use a custom markup instead of keystone?
Yes. Enter your wholesale cost and desired markup or retail price to see the resulting margin. This calculator shows the keystone result and lets you compare it to a custom retail price you set.
Official sources
- U.S. Census Bureau, Monthly Retail Trade: census.gov/retail.
- Federal Trade Commission, Pricing Guidance: ftc.gov/business-guidance.
Reviewed by the CalculatorHub team, edited by James Graham, 15 June 2026. See our methodology.