Definition of mark up

The term "mark up" can be traced back to the 1800s, specifically to the steel industry. At the time, steel was sold at a lower price in bulk quantities, but when it was cut and shaped into specific sizes for various applications, a mark was added to the price to cover the additional costs of processing and handling. This practice of adding a mark or percentage to the base price of a product to cover added costs became a standard business practice in many industries, including retail, publishing, and construction. In retail, it refers to the amount by which a seller increases the price of an item to cover expenses such as storage, overhead, and profit. In publishing, it refers to the process by which editors and designers make revisions and additions to a manuscript and determine the final printed price. And in construction, it refers to the process by which contractors add a margin to the estimated cost of a project to cover overhead and profit. In sum, "mark up" originally referred to the addition of a mark to a product's price to cover added costs, and it has since become a widely used business term in various industries to describe the process of determining a product's selling price.