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Business Terms
Markup
Definition
The amount added to the cost of goods or services to determine the selling price.
Overview
Markup is the difference between cost and selling price. It covers overhead, profit, and other expenses. It's different from margin (percentage of selling price).
Example
A product costs $50 to produce. A 100% markup sets the price at $100.
Best Practices
Calculate markup to cover all costs and desired profit. Consider market pricing.
Common Mistakes to Avoid
Confusing markup with margin
Insufficient markup for overhead
Not adjusting for market
Frequently Asked Questions
What's the difference between markup and margin?
Markup is percentage of cost; margin is percentage of selling price. 100% markup = 50% margin.