"Markup is how much you add to your cost to get your selling price. If something costs $10 and you sell it for $15 , you added $5. That's a 50 percent markup on your cost. Where people get confused is that markup isn't the same as margin, even though the terms get used interchangeably all the time. Margin measures profit as a percentage of the selling price, and markup measures it based on your costs. Same dollar, different percentages."
"Most retailers think in markup because it's easier when pricing products. You know what you paid, decide what markup you need, and do it. A makeup percentage calculator speeds this up when you are pricing hundreds of items because doing it manually takes forever. The formula is pretty straightforward - cost times one plus markup percentage. So $10 times 1.5 gives you $15, the 1.5 comes from 100% plus 50% markup."
Markup is the dollar amount added to cost to determine selling price; a $10 cost sold for $15 reflects a $5 addition and a 50% markup on cost. Markup differs from margin because margin is profit as a percentage of selling price while markup is based on cost. Retailers typically set prices using markup, applying cost × (1 + markup percentage). A markup calculator speeds pricing for large inventories. A single markup rarely fits all products: fast-moving, competitive items need lower markups, slow-selling or specialty items can carry higher markups, and loss leaders may sell at or below cost requiring compensation elsewhere.
Read at Business Matters
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