Even though there is no hard and fast rule for pricing merchandise, most retailers use a 50 percent markup, known in the trade as keystone. What this means, in plain language, is doubling your cost to establish the retail price.
What is the standard markup price?
Markup Percentage Formula
For example, if a product costs $10 and the selling price is $15, the markup percentage would be ($15 – $10) / $10 = 0.50 x 100 = 50%.
How do you calculate markup price?
To find markup percentage, businesses use the markup percentage formula:
- Markup Percentage = (Markup / Cost) x 100% Determine markup. Markup is the difference between selling price and cost:
- Markup = Selling Price - Cost. Divide markup by cost. ...
- Markup Percentage = (Markup / Cost) Convert to a percentage.
