How to Calculate a Markup

The percentage of cost added to the price is known as the markup.
The percentage of cost added to the price is known as the markup. (Image: muffin store image by StephenD from <a href=''></a>)

Markup refers to the percentage of an item's cost that a retailer adds when reselling it to customers. The higher the markup, the more the retailer will profit. In order to calculate the amount of a markup, you need to know the retail price and actual cost of the item. The markup is usually reported as a percentage.

Things You'll Need

  • Calculator
  • Item cost
  • Item retail price

Determine the cost to produce or acquire the product that you are selling. For example, if you are determining the markup for a table, you may check your purchase invoice to see that it cost you $300 to buy wholesale.

Divide the selling price of the item by the cost of the item. For example, if you sold the table for $330 and you bought it for $300, you would divide $330 by $300 to get "1.1."

Subtract "1" from the result in the step above to calculate the markup expressed as a decimal. Continuing the example, you would subtract "1" from "1.1" to get "0.1."

Multiply the markup expressed as a decimal by 100 to change the markup to a percent. Finishing this example, you would multiply "0.1" by 100 to get 10 percent, which is the amount of your markup.

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