What is markup?

In business, markup refers to the amount added to the cost of a product or service to determine its selling price. It is a key concept in pricing strategy and is typically expressed as a percentage of the cost. The purpose of markup is to cover the costs of running the business (such as overhead, labor, and operational expenses) while ensuring the business makes a prof

Formula for markup

The markup can be calculated using this formula:

Where

• Selling Price is the price at which the product or service is sold to the customer.
• Cost Price is the cost to the business of producing or acquiring the product.