Glossary term
What is Markup?
Short answer
Markup is the amount added to a job's direct cost to set its selling price, usually shown as a percentage of cost, such as 40 percent over cost.
Markup, explained for tree service owners
Markup is the extra amount you add on top of your direct cost to get the price. If a job costs 1,000 dollars in direct costs and you add 40 percent markup, the price is 1,400 dollars. Markup is different from margin. A 50 percent markup on cost gives a gross margin of about 33 percent, so mixing them up can cost you money. For a tree service owner, markup should cover overhead, profit and risk, not only the direct costs. Check your markup on each job type, and compare it with what your local market will bear. A clear markup rule keeps your quotes consistent and fair.
Related terms
- Gross margin
Gross margin is the share of revenue left after paying direct job costs, such as crew labor, equipment, fuel and disposal, but before…
- Overhead
Overhead is the ongoing cost of running a business that is not tied to one job, such as insurance, office costs, phone plans, software…
- JSON-LD
JSON-LD is the most common format for adding structured data to a web page, written as a small block of code that visitors never see.
- Schema markup
Schema markup is hidden code on a web page that labels its content, such as the business name, services and reviews, so search engines…
- Break-even price
Break-even price is the lowest price for a job that covers all of its costs with no profit left over, found by adding direct costs and a…
- Insurance premium
An insurance premium is the price you pay, monthly or yearly, to keep an insurance policy active.
- Net margin
Net margin is the share of total revenue kept as profit after every cost of running the business, including overhead, has been paid.
More terms, A to Z
All 199 glossary terms This term in the A-Z list Learn by topic Our services Pricing
Want to know how your company does on this?
Get a free 5-minute audit of your phone, website and Google profile. We check what you can see from the outside, in plain English. No call needed.
Get my free 5-minute audit