Finance and accounting
Markup
How much you add on top of cost to set the price.
Facts checked against sources onWhat does Markup mean?
Markup is the amount you add to what something cost you to get the selling price, usually shown as a percentage of cost. If an item costs 60 and you sell it at 100, you added 40, which is a 67% markup (40 divided by 60). The same item has a 40% margin (40 divided by 100). Markup is measured against cost; margin is measured against price.
Where does it come up in case interview prep?
- Positioning and why customers choose: value to the customer and willingness to payLesson in Customers and growth: the economics of marketing
- Channel economics across industries: direct, retail, marketplaces, distributors and sales teamsLesson in Customers and growth: the economics of marketing
- The arithmetic, from the ground upLesson in Case math and quantitative reasoning
- PricingLesson
- How retail works and makes moneyLesson in Retail
- Luxury and fashion economics: channels, markdowns, and currencyLesson in Luxury and fashion
- Beauty economics: from the shelf price to the brand's profitLesson in Beauty and personal care: cosmetics, skincare, haircare and fragrance
- How staffing, recruitment, outsourcing and work platforms workLesson in Staffing and outsourcing: temp work, recruitment, call centres and work platforms
Related terms
- MarginProfit on a sale, as an amount per unit or as a percent of price.
- Cost-plus pricingPrice = cost plus a fixed markup.
- ProfitThe money left over after costs. Revenue minus cost.
- RevenueMoney earned from sales, before costs.
- CostWhat it takes to make and sell the product in a period.
- Fixed costA cost that stays the same when volume changes, within a normal range.
- Variable costA cost that rises and falls with how much you make.
- Semi-variable costA cost with a fixed part and a part that moves with volume.
Learn it in context
See Markup at work in a lesson from Customers and growth: the economics of marketing, with checks as you go.
Spotted something wrong or out of date? Report a mistake. We check every report and correct the page.