Markup Pricing

Markup pricing is a strategy where a business adds a fixed percentage or amount to the cost of a product to determine its selling price. For example, if a product costs $50 and the business applies a 20% markup, the selling price becomes $60. This method ensures the business covers expenses and earns a profit. Markup is often based on industry standards, desired profit margins, or competitive positioning. It simplifies pricing decisions and helps maintain consistent profit margins across products, making it a widely used approach in retail and manufacturing.