Markup is a term used in marketing to indicate how much the price of a product is above the cost of producing and distributing the product. It can be expressed as a fixed amount or as a percentage. There are numerous variations of each. It has been suggested that Product marketing be merged into this article or section. ...

As a Fixed Amount

assume:
retail list price = $1.99 and the product cost is $1.40
MARKUP = price - cost
                  1.99 - 1.40 = .59

assume the actual selling price was $1.60
MARKDOWN = List price - selling price
                          1.99 - 1.60 = .39

INITIAL MARKUP = list price - cost
                                 1.99 - 1.40 = .59

MAINTAINED MARKUP = sale price - cost
                                         1.60 -1.40 = .20

As a Percentage

Algebra:
Markup
example:
(Original * Markup) + Original = Total

Using the distributive property of elementary algebra:
Original * (Markup + 1) = Total

Solved for Markup:
(Total / Original) − 1 = Markup

Solved for Original:
Total / (Markup + 1) = Original

Markup is the decimal representation of the markup percentage.
Original is the original amount/price.
Total is the marked up amount/price.

In mathematics, and in particular in abstract algebra, distributivity is a property of binary operations that generalises the distributive law from elementary algebra. ... Elementary algebra is the most basic form of algebra taught to students who are presumed to have no knowledge of mathematics beyond the basic principles of arithmetic. ...

Specific:
INITIAL MARKUP % = initial markup / sale price
                                    .59 / 1.99 = 29%

MAINTAINED MARKUP % = maintained markup / sale price
                                              .20 / 1.60 = 13%

MARKUP % ON COST = markup / cost
                                        .59 / 1.40 = 42%

MARKUP % ON PRICE = markup / price
                                          .59 / 1.99 = 29%

To convert from markup on price to markup on cost:
MARKUP ON COST = markup % on price / 1 - markup % on price
                                    .29 / (1 - .29) = 42%

To convert from markup on cost to markup on price:
MARKUP ON PRICE = markup % on cost / 1 + markup % on cost
                                    .42 / (1 + .42 ) = .29

PRICE = cost / 1 - markup % on price
              1.40 / (1 - .29) = 1.99

COST = price / 1 + markup % on cost
              1.99 / (1 + .42) = 1.40

PRICE = markup / markup % on price
              .59 / .29 = 1.99

Some Customary Markup Percenages for Retail Businesses

Using the formula (price - cost) / price

• New cars 15%
• Used cars 75%
• Electrical Appliances 30%
• Clothing 50%
• Trend Clothing 59%
• Crystal Ware 60%
• Gifts and clocks 55%

See also : marketing, pricing, cost-plus pricing, production, costs, and pricing It has been suggested that Product marketing be merged into this article or section. ... Pricing is one of the four aspects of marketing. ... Cost-plus pricing is a pricing method commonly used by firms. ... In microeconomics, production is the act of making things, in particular the act of making products that will be traded or sold commercially. ...