What is markup?


Markup (definition)

Markup is what you add to prices in order to make money. It’s expressed as a percentage.

Many businesses set their prices by working out what it costs to provide goods and services, then marking up that amount by a percentage.

The cost of goods or services sold times markup, plus the cost of goods or services sold, equals the sale price.

Markup is entered as a decimal. For example, a 35% markup is shown as 0.35

Your markup determines how much money you make on each sale. It ends up being your gross profit. A low markup may leave you with too little cash to run the business and turn a profit. Too high of a markup can turn customers off.

See other terms

Margin
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