Markup is how much you add on top of cost to set a price, stated as a percentage of the cost: (price − cost) ÷ cost. Triple a $3 cost to a $9 price and you have applied a 200% markup. It is the most intuitive way most makers first think about pricing — start from what it cost and add a multiple.
The trap is mistaking markup for margin. Markup is measured against cost; margin is measured against price, so the same price is always a bigger markup number than margin number. A "50% markup" leaves only a 33% margin — a gap that has sunk plenty of wholesale deals where the seller thought they had more room than they did.
Markup is a useful starting heuristic, but profitability is ultimately judged in margin, because margin is what is left to cover overhead and yield net profit.
Related terms
Gross Margin
Gross profit expressed as a percentage of the selling price — what fraction of each dollar of revenue is left after the direct cost of the goods sold.
COGS (Cost of Goods Sold)
The total cost of materials, labor, and overhead directly tied to producing the goods you sell. Tracked automatically through purchases, recipes, and production runs.
Pricing Tier
A named pricing configuration (like retail, wholesale, or market) that applies a markup or adjustment formula to calculate prices. Useful for selling at different price points.