Markup often relates to retail pricing. It includes costs to operate a store like rent, utilities, and employee wages. The boutique's markup helps cover the prime location rent.
Pro Tip 2/3
Not Always Profit
A markup doesn't always signify profit; it can also mean covering business expenses. After considering overheads, our markup isn't pure profit.
Pro Tip 3/3
Price Sensitivity
High markups can deter customers if they feel a product isn't worth the extra cost. Shoppers noticed the high markup on designer jeans.