What is Markup?

Markup is profit as a percentage of cost: (price − cost) ÷ cost × 100.

Example

Buying at $20 and selling at $32 is a 60% markup (but only a 37.5% margin).

Why it matters

Confusing markup with margin is one of the most common pricing mistakes — a 50% markup is just a 33.3% margin.

Calculate it: Markup Calculator

Selling price from cost and markup

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Flashcard

Question

What is markup?

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Answer

Markup is profit as a percentage of cost: (price − cost) ÷ cost × 100.

Related terms

Profit margin

Profit margin is profit as a percentage of the selling price: (price − cost) ÷ price × 100.

Keystone pricing

Keystone pricing means setting the retail price at double the wholesale cost — a 100% markup, or a 50% margin.

Read more in our guide: Profit Margin vs Markup: The Difference That Costs Sellers Money