What Are Some Common Retail Markup Formulas?


Quick Answer

One simple formula retailers can use to mark-up prices is Retail Price = [(cost of item) ÷ (100 - markup percentage)] x 100, according to Shopify. Another formula many retailers use is keystone pricing where retailers mark up the product that they purchase for resale by 50 percent.

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Full Answer

One of the pros of keystone pricing is the formula ensures profitability, explains Shopify. Although the formula works as a good rule of thumb for retailers, it does not factor in specific costs unique to the product or whether consumers can find the product easily. Many retailers use the manufacturer’s suggested retail price to mark up products, also known as the MSRP.

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