Quick answer
A good markup percentage depends on sector, costs, and target margin, but the bigger issue for most UK SMEs is not the exact number — it is whether markup is being confused with margin.
How it works
- Define the business question clearly.
- Use a practical framework rather than guesswork.
- Check the result against margin, VAT, cashflow, and operating reality.
- Use the relevant LumixAI tool to apply it properly.
Why markup is often misunderstood
Markup is added to cost. Margin is measured against selling price. When SMEs use the wrong measure, prices can look healthy on paper but fail to produce enough real profit.
What affects markup in practice
- Product type and direct cost
- Freight, duty, and packaging
- VAT treatment and timing
- Merchant fees or fulfilment costs
- Target gross margin
UK context
For UK businesses, VAT and landed cost can materially change whether a markup is genuinely workable. Under HMRC Making Tax Digital rules, cost and sales tracking also need to be accurate.
Apply this using LumixAI tools
The fastest way to use this in practice is to go straight to the right tool.
"Open Pricing Calculator →"Common questions
What is a good markup percentage?
A good markup percentage depends on cost structure and target margin, but many SMEs need to start by separating markup from margin properly.
Why is markup not enough on its own?
Because a markup can still leave margin too weak once real operating costs are taken into account.