How to Calculate a Markup

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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.

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.


About the Author

Mark Kennan is a writer based in the Kansas City area, specializing in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."

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