What is Initial Markup in Retail? Explained

Initial markup in retail is the percentage difference between the cost price and the initial selling price of a product. This crucial metric, calculated as (Selling Price - Cost Price) / Cost Price * 100, determines the profit margin on merchandise. Retailers strategically set initial markups to cover costs, accommodate discounts, and achieve desired profit margins. Effectively managing initial markups is essential for sustaining profitability and competitiveness in the retail market.