How to calculate markup percentage

You've bought your product - it's in your warehouse or in storage somewhere but how do you decide what price to sell it for.  Markup percentage enables you set a price for your product based on the percentage profit you wish to gain. This type of pricing is called the cost based pricing or markup pricing.

For Instance:
1: You bought T-shirts at £0.50 each. You want a profit of 60% on each T-shirt when you sell them. Your selling price can be calculated by applying the following formula:

       Selling Price = (Markup % * Cost Price) + Cost Price
       Selling Price = (60% x £0.50) + £0.50
       Selling price = £0.30 + £0.50
       Selling Price = £0.80
This will be the selling price of the T-shirt


2: But if you already have a product that you are selling for £24 and you bought for £15. To calculate the Markup percentage for that product, apply the following formula:

       Markup = (Selling Price - Cost Price) / Cost price * 100%
       % Markup = (£24 - £15) / £15 x 100%
       % Markup = £9 / £15 x 100%
       % Markup = 60%
Your markup percentage is 60%

NB: 
Please note that this markup % has taken into account, an approximation of all your variable costs and overhead costs hence the high percentage used to make calculation.

Watch this video on how to calculate markup percentage

Math Lessons : How to Calculate Markup Percentages, by eHow

Click to read about how to determine your selling price that takes into account both variable and overhead costs.