Retail Markup Definition¶

Retail markup is the difference between the price of a product and the cost of that product. Retail markup percentage is the retail markup as a percentage of a product's unit cost. This method is commonly used to find the price of retail products which are somewhat of a commodity; costs are fixed and the market dictates purchasing price. Furthermore, many industries have a standard retail markup percentage which most products are sold at.

The retail markup definition is common to many products, services, and industries. Where retail sales are occurring it is likely that someone has been tasked as the retail markup calculator. It is important to note that retail markup, margin, and other comparisons of cost of goods sold and price are not the same.

Retail Markup Formula¶

To find the retail Markup amount in dollars: Retail Markup = Sales price - Cost

To find the retail Markup percentage: Retail Markup = Markup amount / Retail price

Retail Markup Calculation¶

For example, if a product's unit cost is $10 and its retail price is $15, then the retail markup is $5:

Retail markup = Retail price - Unit cost = $15 - $10 = $5

and the retail markup percentage is 50%:

Retail markup percentage = (Retail markup/Unit cost) = ($5/$10) = 50%.