A markup is added into the total cost incurred by the producer of a good or service in order to cover the costs of doing business and create a profit.
[1] Markup can be expressed as the fixed amount or as a percentage of the total cost or selling price.
[2] Retail markup is commonly calculated as the difference between wholesale price and retail price, as a percentage of wholesale.
A different method of calculating markup is based on percentage of selling price.
This method eliminates the two-step process above and incorporates the ability of discount pricing.