Definition: How much profit is going to cover the costs.

Note: An average of markup at a product level

Equation: average of (Gross Margin / Costs) or average of (Profit / Costs)

Example: Retailers want to see average markup to be over 100%. If it is over 100% the profit of the sale has covered the cost. If the value of the markup is under 100% then you are losing money and no one wants that! In the example below, we see the value of the markup is 104%, which means we are covering our costs and also getting 4% (104-100) profit on average.