Markup is the difference between what something costs you and what you sell it for, expressed as a percentage of cost. It is the most common pricing tool for retailers and freelancers. The cousin metric, margin, is computed against the selling price instead — they are easy to confuse. Wikipedia’s markup entry has a clean side-by-side comparison.
How markup is calculated
Selling price = cost × (1 + markup% ÷ 100), and profit = selling price − cost. A 40% markup on a $50 item gives a selling price of $70 and a profit of $20. Note that a 40% markup is only a 28.6% margin — never quote them interchangeably.
Worked example
A wholesale lamp costs $32 and the shop wants a 60% markup: selling price = 32 × 1.6 = $51.20, profit per lamp = $19.20.
