← Glossary Business glossary How to price a product
What is Markup?
Profit expressed as a percentage of cost, not of the selling price.
Markup is how much you add on top of cost, as a percentage of that cost. It is easy to confuse with margin, which is a percentage of the selling price.
Example: buy for £10, sell for £15. Your markup is 50% (£5 ÷ £10), but your margin is only 33% (£5 ÷ £15). Same profit, two different numbers. When someone quotes a percentage, always ask which they mean.
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