How to Price Products Using Markup
Markup is the percentage added to your cost price to arrive at a selling price. It's the go-to pricing method for retail, wholesale, and manufacturing because it's simple: know your costs, apply your target markup, and you have your price. The key is choosing the right markup for your industry and goals.
Common Markup Percentages by Industry
- Clothing/Apparel — 100–300% markup (keystone pricing at 100% doubles the cost)
- Jewelry — 100–200%
- Grocery/Food retail — 5–25%
- Electronics — 10–30%
- Pharmaceuticals — 200–5,000% (prescription drugs)
- Restaurants — 200–400% on food; 400–1,000% on alcohol
Frequently Asked Questions
What is keystone pricing?
Keystone pricing is a simple retail strategy of doubling the wholesale cost to set the retail price — a 100% markup (50% margin). It's a common starting point for retail pricing, especially in clothing and accessories, though it should be adjusted based on competition, demand, and overhead.
Why do markup and margin give different percentages?
Markup is calculated on cost; margin is calculated on selling price. A 50% markup results in a 33.3% margin. This is a common source of pricing confusion. When communicating with accountants or investors, margin is usually preferred. When pricing products internally, markup is often easier to apply.