Markup
Also called: mark-up, markup percentage
What is Markup?
Markup is the amount added to the cost of an item to arrive at its selling price, expressed as a percentage of that cost. It is how buyers and wholesalers usually think about pricing, because they start from what they paid.
Why Markup matters
Markup and margin describe the same rupee of profit from opposite ends, and confusing them systematically underprices a business. A 50% markup is only a 33% margin, and applying a target margin as a markup quietly gives away the difference on every sale.
Markup formula
Markup % = (Selling price − Cost) ÷ Cost × 100
To convert a target margin into a markup: markup = margin ÷ (100 − margin) × 100.
How Markup works in practice
Retailers typically set a standard markup per category, then adjust for competition and shelf life. Working from cost is fine as long as the resulting margin is checked, especially after a supplier price rise.
Worked example
An item costing ₹200 sold at ₹300 carries a 50% markup and a 33.3% margin.
Frequently asked questions
Use markup to set prices from cost and margin to judge whether the resulting price is profitable enough.