Calculating Mark-up: Understanding % Increase in Price for Retailers

[tkiesling]

If a product costs a retailer \$2.20 and it is sold at \$3.19
what is the % mark-up and how does one arrive at that?
thx

 

[skeeter]

If a product costs a retailer \$2.20 and it is sold at \$3.19
what is the % mark-up and how does one arrive at that?
thx

$\dfrac{3.19}{2.20} = 1.45$

45% mark up ...

 

[topsquark]

If a product costs a retailer \$2.20 and it is sold at \$3.19
what is the % mark-up and how does one arrive at that?
thx

Congratulations MarkFL. Your price is going up!

-Dan

 

[HOI]

Equivalently, and the way I would have done it, since the item was bought for \$2.20 and sold for \$3.19 the actual "mark up" is 3.19- 2.20= \$0.99 so the percentage mark up is $$\frac{0.99}{2.20}= 0.45$$ so again a 45% mark up.

 

[tkhunny]

If a product costs a retailer \$2.20 and it is sold at \$3.19
what is the % mark-up and how does one arrive at that?
thx

One must ALWAYS remember that there are at least TWO kinds of "Markup". The method used depends on how you think about your business and how you report costs and profits.

3.19 - 2.20 = 0.99 -- This is the Markup.

0.99 / 3.19 = 31.03% Markup when compared to the Retail Price. The theoretical maximum of this sort of markup is 100%. (Well, it's really a "supremum", not a "maximum", but I digress.)

0.99 / 2.20 = 45.00% Markup when compared to the Wholesale Price. There is no theoretical maximum to this sort of markup.

There are other methods. In particular, some business owner may want the first 5¢ of everything, so you have to shave off a nickle before calculating the "Markup" for the purpose of the business enterprise. Really, it's anything you can think of and calculate consistently.