Keystone Markup Keystone Markup, also known as keystone Pricing / keystoning, is a common pricing method. Let ‘s first look at its definition, which refers to reselling any commodity. Its pricing is based on the purchase price or twice the production cost, which is twice the wholesale price. This pricing is called doing a keystone price increase. Generally speaking, it means doubling the pricing. When the retailer resells the product, the price is directly doubled, and the selling price is set to the double purchase wholesale price. Does that mean that all retailers will increase their prices in accordance with the keystone pricing method? This is not necessary. I believe everyone also knows that different products and different industries have different profit margins, so this pricing method still needs to be determined according to specific products and industry conditions. For example, in some industries such as daily necessities, the profit of products is relatively low. Suppose the retailer ’s purchase wholesale price is $ 1, and he sells it for $ 1.7 / 1.8 at retail. It can be seen that he cannot make a double price increase. That is to say, for some industries with slightly lower profit margins, compared with the wholesale price, his retail price is less than 2 times the price increase. In some industries, such as jewelry and cosmetics, his profits are relatively high. Relatively, his double pricing will definitely be much higher than 2 times. Overhead Overhead, also known as Overhead cost / Burden cost, refers to the overhead costs of operations, that is, the costs that are not directly linked to the product. In other words, Overhead cost does not include direct labor costs, raw material costs, third-party costs, or related to these costs. Generally speaking, when you run a company / business, you need to bear the expenses, and this expense will not be directly included in the cost of manufacturing products or providing services, and will not directly generate profits. For example, utilities, rent, insurance, taxes, etc. would incur during the operation. Gross Profit Margin We know that Profit Margin refers to the profit rate, while Gross Profit Margin refers to the gross profit margin, which is the percentage of gross profit and sales revenue. In terms of composition, the gross profit margin reflects a product that has undergone differential R & D and design, and compared with the part of competing products that add value, the more value added, the more gross profit naturally. There are many factors that affect the size of gross profit margin, such as product cost, market competitiveness, corporate marketing and so on. In terms of price, let 's first look at the calculation method of gross profit margin= (income-cost) / revenue × 100%, reflected in the price, it is gross profit margin = (selling price-buying price) / Selling price × 100%. For example, the retail price of a retailer's purchase of a certain product is $ 5, and the retail price sold to consumers is $ 10. According to the calculation formula, his gross margin should be calculated to be 50%. Conversely, when we know the retailer's gross profit margin, it is clearer how this sales price is priced.