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In retail sales, the markup is the difference in price between what the consumer pays (the retail price) and what the retailer pays (the wholesale price). This represents the retailer's gross revenue, which is then applied to his costs and the balance is his profit.

Even products which seem to be very cheap may actually be considerably marked up, if the retailer forces its supplier to lower the wholesale price, and as a result the supplier forces the manufacturer to sell to him at less than cost. This is how Walmart makes its money.

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12y ago

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