What does 35% markup in a business mean?

[RichInSpirit]

Myself and a coworker were discussing a different business sector earlier(a retail business) and he said it has a 35% markup on everything sold.
I was trying to visualise how much profit the business might be making.
Hypothetically say the business is selling 1.35 million per annum does that mean it is making a gross profit of €350000 or would all costs have to come out of the €350000?
Neither of us are financial experts.

 

[Brendan Burgess]

Hi Richie

That is it.


Vat makes it a bit more complicated.

But that is the gross margin.

All the other costs such as salaries, insurance, rent and overheads generally have to come out of that.

And of course, while they might mark stuff up by 35%, they would often discount it at sales times.

Brendan

 

[RichInSpirit]

Thanks Brendan!