Markup

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The percentage added to a cost to get the price. A $100 part at 30 percent markup sells for $130.

Markup is how material and subcontractor costs become prices. It covers the trip to buy the part, the time to handle it, the warranty on it, and some profit. Twenty to forty percent on materials is common in the trades; more on small parts, less on big-ticket equipment.

Markup and margin are different numbers for the same money, and mixing them up costs real dollars. A 30 percent markup is a 23 percent margin. The markup versus margin calculator on this site shows both.

Related: Margin · Overhead · Labor rate

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