Financial Glossary
Markup Percentage
Markup percentage is the amount added on top of an item's cost to arrive at its selling price, expressed as a percentage of that cost. A 50 percent markup, for example, means the selling price is the cost plus half the cost, so an item costing one hundred dollars sells for one hundred fifty. Markup is calculated on cost, which distinguishes it from gross margin, which is calculated on the selling price, and the two figures are not interchangeable.
Problem & Application
Hospitality and campground operators selling firewood, retail goods, or add-on services need a consistent markup to ensure each sale actually covers cost and contributes profit. Confusing markup with margin is a common pricing error that quietly erodes profitability, since a 50 percent markup is not the same as a 50 percent margin. Setting markup deliberately by product category keeps pricing defensible and protects the bottom line.
In Short
Markup percentage is a simple lever for pricing, but it must not be confused with gross margin, which is measured against the selling price. Knowing the difference keeps pricing decisions grounded in real profitability.