Glossary
Markup
Definition
Markup is how much you add to the cost of an item to get its selling price, shown as a percentage of the cost. Markup = (price − cost) ÷ cost × 100. An item that costs 7,000 and sells for 10,000 has a 42.9% markup, which is the same as a 30% margin.
To hit a target margin, do not add that percentage to cost. Divide instead: price = cost ÷ (1 − margin). A 30% margin on a 7,000 cost needs a price of 10,000, not 9,100.
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