 # Mark-up & Gross Profit Percentage

Mark-up is the amount you add to the cost to get the retail price. Let's say that you mark up an item for which you pay \$3.00 by 50%. Convert the percentage to a the decimal form 0.50 and multiply \$3.00 by 1.50 to get \$4.50. Your mark-up is 50% because you increased the cost by 50% to get the retail price.

Following through with the same example, now we look at this in reverse. When you sell the item for \$4.50 with a cost of \$3.00, then you have a profit of \$1.50 on a sale of \$4.50. The gross profit percentage is 1.50/4.50 = 0.33 or 33%.

When you have the item, know what gross profit percentage you want, know the cost, this is the procedure to find the mark-up percentage.

#### EXAMPLE: 1.49 X \$3.00= \$4.50

Or, use this worksheet:

#### 6. Multiply line 4 by line 5. This is your sale price.

Expressed algebraically, where "M" is the multiplier and "G" is the gross profit percentage desired, then:

### M = 1/(1-G)

This is a chart of the most commonly used mark-up percentages. To mark something up 50% remember that you multiply it by 150%. To mark something up 200%, you multiply it by 300%.

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