Markup is the amount you add to what an item costs you in order to reach its selling price. It is usually stated as a percentage of the cost, so a product that costs 100 and sells for 140 carries a 40 percent markup. Markup and margin measure the same gap between cost and price, but they are calculated against different bases, which is why the two percentages never match.
How it works
The formula is straightforward: divide the amount added by the cost. If a case of goods costs you 80 and you sell it for 120, the markup is 40 divided by 80, or 50 percent. To go the other direction, multiply cost by (1 plus the markup) to get price. Applying a consistent markup percentage across a catalog is the simplest way to set prices, since the same rule scales from a single unit to a full pallet.
Markup versus margin
This is where quotes go wrong. Markup is figured on cost; margin is figured on the selling price. A 50 percent markup is only a 33 percent margin, because the same 40 of added value is a larger share of an 80 cost than of a 120 price. Mixing the two up leads to underpriced deals, so decide which basis your team quotes on and stay consistent.
Why it matters in B2B quoting
B2B buyers often negotiate, order in volume, and expect tiered pricing. Knowing your markup on every line lets you offer a volume discount without dropping below cost. When you build a quote in Shopify, you are effectively working backward from cost plus markup to a number the buyer will accept. For related pricing terms, see the B2B quoting glossary, and if you are comparing plans, the pricing page lays out the tiers.
Example
A distributor buys widgets at 10 each. Targeting a 60 percent markup, they quote 16 per unit. On an order of 500 units, that is 8,000 revenue against 5,000 cost, leaving 3,000 gross profit.