What Is Markup?
Definition
Markup: The profit as a percentage of the cost: markup = (price − cost) / cost × 100. A product bought for 30 and sold for 45 has a 50% markup. It has no upper limit.
Markup is the profit as a percentage of the cost: divide the price minus the cost by the cost and multiply by 100. Sellers use it to set a price on top of the cost. Selling at twice the cost is a 100% markup; there is no upper limit. For one product the markup is always larger than the margin.
Where it appears in the formulas
price = cost × (1 + markup / 100). A 25% markup on a cost of 45 gives a profit of 11.25 and a price of 56.25. When you know the price and the cost, markup = (price − cost) / cost × 100. The profit margin calculator gives the markup and the margin together.
The difference from profit margin
The profit margin divides the same profit by the price instead of the cost. The product above has a 25% markup and a margin of 11.25 / 56.25 × 100 = 20%. To turn a markup into a margin, use margin = markup / (1 + markup), as decimals.