Markup and margin measure the same profit from different angles. Markup is profit divided by cost. Margin is profit divided by price. A 50% markup equals a 33% margin. Confusing the two leads to underpricing: if you need a 40% margin and apply a 40% markup instead, you're actually running at 28.6% margin and leaving money on the table.
Markup & Margin Calculator for Coffee Shop
Pre-filled with real coffee shop industry benchmarks
Coffee is one of the highest-markup consumer products in the world. A shot of espresso costs $0.15 to $0.25 to pull (beans only), and a latte with milk costs $0.40 to $0.70 in ingredients, yet sells for $5 to $7. That is a 700 to 1,500% markup on ingredients. But the markup on ingredients is misleading because it ignores the cost of the barista, the espresso machine, the rent, and the experience. The real margin in coffee is measured after labor and occupancy costs. A coffee shop doing $30,000/month in revenue with $6,000 in COGS (20% cost of goods) looks incredible, but after $10,000 in labor and $5,000 in rent, the actual operating margin is $9,000 (30%). Your pricing strategy should focus on average ticket: every add-on (extra shot, alternative milk, flavor syrup, a pastry) increases revenue with minimal additional cost. This calculator helps you model how small changes in pricing and upselling affect your overall margins.
Markup & Margin Calculator
Pre-filled with coffee shop industry defaults. Edit any field to use your real numbers.
Markup
257.1%
Margin
72.0%
Profit
$252
Coffee Shop industry average: 72.0% margin (28.0% COGS).