The amount by which the cost of a service or product has been increased to arrive at the selling price. It is calculated by expressing the profit as a percentage of the cost of the good or service. For example, if a product cost £8 and is sold for £12, the mark-up would be:£4/£8 × 100 = 50%.
£4/£8 × 100 = 50%.
Note that the margin is calculated by expressing the profit as a percentage of the selling price; in this case it would be:£4/£12 × 100 = 33.3%.
£4/£12 × 100 = 33.3%.
The mark-up is widely used in retailing, both for setting prices and as a ratio for control and decision making. See gross profit percentage; net profit percentage.