Typical markup percentages across retail, restaurants, manufacturing, and services — and how they translate into the gross margins those industries actually report.
Markup percentage varies enormously by industry — and because markup and gross margin
aren't the same number, comparing your markup directly to a margin figure from a
different source will give you the wrong read.
Typical markup by industry
| Industry |
Typical Markup |
Equivalent Gross Margin |
| Grocery / supermarket |
15–25% |
13–20% |
| Restaurants (food cost) |
200–300% |
67–75% |
| Apparel / fashion retail |
100–150% |
50–60% |
| Furniture |
80–100% |
44–50% |
| Jewelry |
100–200%+ |
50–67%+ |
| Professional services |
50–150% |
33–60% |
| Software / SaaS (marginal cost basis) |
Often 300%+ |
75–85% |
Why the conversion between the two matters here
A 200% markup — common in restaurants when quoting off raw food cost — sounds enormous
but converts to a 67% gross margin, which then has to cover rent, labor, and everything
else. Comparing a restaurant's "200% markup" directly to a retailer's "50% markup"
without converting both to margin makes the restaurant look 4× more profitable than it
actually is relative to revenue.
Why low-markup industries can still be healthy businesses
Grocery retail runs on razor-thin markups (15–25%) but compensates with extremely high
inventory turnover — the business model depends on volume and velocity rather than
margin per unit. A markup benchmark only tells part of the story without knowing typical
turnover for that category.
Using markup benchmarks to price a new product
Start from the category benchmark markup, then adjust up for differentiation (a unique or
hard-to-compare product supports a higher markup than a commodity one) and down for highly
price-transparent categories where customers comparison-shop easily.
Frequently asked questions
Which is more useful for benchmarking against competitors — markup or margin?
Margin, almost always — it's the standard basis used in financial reporting and investor
communication, so it's what you'll find in public benchmarks and comparable company data.
Should I set prices based on markup or margin targets?
Either works mathematically as long as you're consistent — but setting a margin target
directly avoids the conversion step and the common error of assuming a markup percentage
equals the margin percentage.
Use the Markup Calculator to convert between markup and
margin for your own cost and pricing figures.