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Guru_Guy, Lawyer (JD)
Category: Tax
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If i bought something for $10.00 and sold it for $20.00, is ...

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If i bought something for $10.00 and sold it for $20.00, is it a 200% mark up?
Submitted: 9 years ago.
Category: Tax
Expert:  Guru_Guy replied 9 years ago.

No, that is a 100% mark up. Mark up is the difference between the sales price and market price. So if you sell something for $20 that you purchased for $10, your mark up is $10 ($20 - $10). When calculating the percentage, you compare that mark up to the purchase price. The $10 mark up is 100% of the $10 purchase price.

I hope this helps!
Customer: replied 9 years ago.
but if you multiply $10. times 200% you get $20.
That is why I'm confused.
Expert:  Guru_Guy replied 9 years ago.
The markup is basically the amount of profit made. So the profit in the scenario you lay out is only $10 ($20 sales price minus the $10 cost). That $10 profit is 100% of the initial investment. You are calculating the markup based on the total price, not just the amount of profit.

I hope this helps!
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