Markup vs Margin: What's the Difference?
Markup compares your profit to the cost; margin compares it to the price.
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1.What is markup?
Markup compares your profit to the cost; margin compares it to the price.
2.A mug costs 80 and sells for 100. What are markup and margin?
The profit is 20; 20 / 80 = 25 percent markup and 20 / 100 = 20 percent margin (worked example).
3.A lamp costing 100 has a 50 percent markup. What is its margin?
The price is 150 and the profit 50; 50 / 150 is one third, about 33 percent.
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Sources (2)
- International Monetary Fund: World Economic Outlook April 2019, Chapter 2 - The Rise of Corporate Market Power and Its Macroeconomic Effects
- Eigene Berechnung (synthetisches Rechenbeispiel
Education only. Not financial advice.