Initial markup or IMU is a pricing strategy used by retailers and ecommerce businesses to determine the initial price of a product based on the cost of goods sold (COGS) and desired profit margin. It is calculated by adding a percentage (the markup) to the cost of the product. For example, if a product costs $10 to produce and the desired markup is 50%, the initial price would be $15 ($10 + ($10 x 50%)).

This pricing strategy is often used by retailers and ecommerce businesses as a starting point for determining prices, especially for new products or when the cost of goods changes. It allows businesses to take into account their costs and desired profit margin while still being able to remain competitive in the market.

IMU can also be used to adjust prices over time, as the cost of goods may change, which can affect the profit margin. As the cost of goods increases, the markup percentage will also increase to maintain the same profit margin.

Initial markup or IMU can also be used in conjunction with other pricing strategies such as price elasticity, market pricing, and competitor price indexing to ensure that prices are competitive and aligned with market trends.