Margin vs Markup

How margin and markup are calculated

Clayton avatar
Written by Clayton
Updated over a week ago

Our % Define Markups tool allows you to mark up your equipment by setting a margin, or setting a markup percentage.

The terms margin and markup are often mistaken as interchangeable words with the same/similar meaning. However, these terms have two different meanings:

Margin% is the difference between the selling price and the profit. 

(Price - Cost)/Price = Margin%

Example - An item has a $100 Price and a $50 Cost.

(100-50) / 100 = 0.50, which is a 50% Margin.

Markup% is the difference between the cost and the selling price.


(Price - Cost)/Cost = Markup%

Example - An item has a $100 Price and a $50 Cost.

(100-50) / 50 = 1.00, which is a 100% Markup.

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