I much prefer to set prices according to the market rather than the cost. Once you establish the market price for your product/service - your cost can be used to determine if the business can make a profit.
I think it depends a lot on the product and what the seller feels the market can bear. For instance, we all know the huge markup that is on a pizza, you hear it all the time, but, obviously everyone can`t achieve those same kinds of markup, so, a lot is based on the product and market for it.
I think you should be making sure you have at least 60-100% mark up. If not, you have got no margin for marketing promotions and discounts. Last but not least, you need to factor in wastages and damages/discrepanices to some stock.