Markup definition

A percentage added to the cost to get the retail selling price.

Example: A widget bought for $5 and sells for $10 has a mark-up of 100%. (Add $5 to
the $5 cost to get the price.)
A widget bought for $2, which sells for $3, has a mark-up of 50%, (Add $1 to the $2 cost
to get the price.)

Sales Percentage Increase or Decrease Calculator

Calculate Percent Difference of Retail Sales

Do you need to know how much retail sales were up or down compared to last year's
sales figures? That is put the two sales amounts in the calculator below to determine the
percent increase or decrease in sales.
For example, if ABC sales were $5200 this year and last year they were only $3400, the
percent increase in sales was 52.94 or rounded to 53%.

Previous Sales Amount #1

Current Sales Amount #2

Percent Increase / Decrease %

Markdown definition
Planned reduction in the selling price of an item, usually to take effect either within a
certain number of days after seasonal merchandise is received or at a specific date.

OR

The difference between the highest current bid price among broker-dealers in the market
and the lower price that a dealer charges a customer.
Retail Markup Markdown calculator

Calculate Retail Sales Price and Profit or Loss

Use the retail markup/markdown calculator to determine the selling price of a

product if you know the cost of the merchandise as well as the percent markup.
Enter a positive percent to calculate markup or a negative percentage markdown to
determine the retail price of an item on sale.
For example, if your store is having a 35% Off clearance sale, enter -35%.

Cost of Goods $

Markup/Markdown %
Calculate Reset
Retail Sales Price $

Gross Profit/Loss $

For example:
Retail Markup on Engagement Rings.

• Jewellers expect enormous profits from engagement ring.

• Mark-ups range from 50% to 400%.
• Mark-ups are around 300% in most retail locations.
• Retail jewellers mark up diamond engagement rings by 100% up to a
staggering 1000%.
• The jeweller may have purchased the stone for $1,000.00 but is
selling the stone for $3,000.00.
• Diamonds and jewellery have healthy mark-up ranging from 100% to
400% over cost.
• Pay the regular retail price.
• Smaller, local stores usually have lower overhead than 'mall'
stores.
• Able to find a better value and better service.

Practice Problems
Sauce and Dips Long Problem
1. .48
2. .08
3. 12,500,000
4. .41%

Mr. Bob Sled

1. 4
2. 6 and .6%
3. 150,000 units and $1,500,000
4. a. 150,000/900,000= 16% b. 233333.33/900,000=25.9%

% Markup on selling price = Selling price – cost = Markup__

Selling Price Selling Price

% Markup on cost = Selling price – cost = Markup__

Cost Cost

Markdown percentage = Amount of reduction

Original Selling Price

1. Compute the markup on selling price for an item that retails for $19.95 and
costs $11.20.

.438

2.
Dress Shirt Sport Shirt Belt

Selling Price $30.00 $24.95

$12.50

Cost $18.00 $14.35 $

7.50

Markup in dollars _12_____ _10.60_____

_5_____

Markup % on cost __.67____ __.74____

__.67____
Markup % on selling price ___.4___ __.42____
__.4____

Markup and Markdown Problems

Markup

A shopkeeper buys an item at a certain cost. He then adds the so-called markup to this
price to cover his expenses and to make a profit. The selling price is then the sum of the
cost and the markup. In equation form:
Cost + Markup = Selling Price . (1)

The routine thing for a shopkeeper to do is to say that the markup is a certain percentage
of the cost. Let us say that a shopkeeper knows that he needs a markup of, say, 40%, to
be able to earn a living. This markup rate will always relate to the cost of the item. If we
use r for the markup rate we can write the markup as: Markup = r ⋅ Cost . (2)

If the markup rate is 40%, we then use a value of r = 0.4 .

Combining equations (1) and (2) we get:
Cost + r ⋅ Cost = Selling Price . (3)

Equation (3) is known as the general markup equation. Many problems concerning
markup can be solved just by using equation (2), but sometimes equation (3) is needed.

Example 1: A camera costing a shop owner $270 is sold by him for $430. Find the
markup rate.

Solution: Using equation (2) we first need to calculate the markup which is $430 -
$270 = $160 and get from equation (2): 160 = r ⋅ 270 → r = .59 The
markup rate is thus 59%.

Using equation (3) we get: 270 + r ⋅ 270 = 430 . We rewrite this equation
as: 270 r + 270 = 430 then we solve this equation and get the same
answer.

It is up to you to know how to solve equations. Keep in mind though that

equation (3) solves all markup problems while equation (2) will only solve
juts a few.
Example 2: A greengrocer sells a box of apples for $5.70. If the markup rate is 60%,
what was the wholesale price (the cost for the greengrocer)?

Solution: Here equation (2) will not help us. From equation (3) we get:
C + 0.60 C = 5.70 where we have used C as the wholesale price.
Combining the like terms on the left hand side we get:
1.60 C = 5.70 → C = $3.56 .

Example 2 is the key to a problem that concerns most of us living in Europe. A

shopkeeper wants to sell an item for a certain amount but has to, before putting the
selling price on the tag, add the so-called Value Added Tax (VAT). Thus the price the
customer pays is the price the shopkeeper wants to get for the item plus the VAT. The
shelf price is what you have to pay but if you arrive at the shop with a VAT form, what
will you have to pay? How much would you save by having a VAT form handy? Can
you calculate it beforehand? Sure you can. Look at the following example:

Example 3: Suppose the shelf price of a computer is €799. The VAT rate in Germany
is 16%. What is your refund?

Solution: Let x be the price before the VAT is added. Equation (3) gives us:
x + .16 x = 799 . Combining the like terms on the left hand side and
solving the equation we get 1.16 x = 799 → x = 688 .79 which means
that this is the price you will have to pay. You have saved: €799 -
€688.79 = €110.21.

Markdown

Suppose an item does not sell. The shopkeeper then lowers the price in an effort to sell
the item at this so-called sale price. The usual thing for a shopkeeper to do is to take a
certain percentage off the regular price. This percentage is called the markdown or the
discount rate r. The idea is as follows:

Markdown = r ⋅ Regular Price (4).

We also know that Regular Price − Markdown = Sale Price (5).

Combining (4) and (5) we get: Regular Price − r ⋅ Regular Price = Sale Price . (6)

Just as in case equations (4) and (5) do not solve a markdown problem, equation (6) will
always solve that problem, no matter what. It is known as the general markdown
equation.

Example 4: A t-shirt has a regular price of $49.95. After a markdown of 30%, what is
the sale price?

Solution: Equation (6) gives us: 49 .95 − (.3) ⋅ ( 49 .95 ) = Sale Price . We easily see
that we have a sale price of $34.97.

Example 5: After having been reduced 75% in price, a sweater is on sale for $15, what
was the regular price?

Solution: Using R as the regular price, equation (6) gives us: R − 0.75 R = 15 .
Combining like terms on the left hand side we get:
0.25 R = 15 → R = $60 .