Calculating markup is an important business concept that involves establishing the cost of goods and services and increasing it to create a profit. At its core, calculating markup is determining the price that needs to be applied to an item, in order for the seller to make a profit. It involves considering both the cost of the item, as well as additional fees associated with the sale. Markup is often expressed as the percentage increase in cost of an item, which helps businesses easily determine the pricing that applies to each item.