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.