Markup is an increase in the cost of a product to arrive at its selling price. The amount of this markup is essentially the gross margin of the seller, which is needed to pay for operating expenses and generate a net profit. The markup amount may be expressed as a percentage.
For example, a retailer applies a $10 markup to the $20 price of goods it has obtained from a supplier. The resulting $30 price is then used to resell the goods to the customers of the retailer. This markup is sometimes known as the retail markup.