Margin looks at the sale.
Buy for $80 and sell for $125: the $45 gross profit is 36% of the selling price.
(Price − Cost) ÷ Price × 100Margin & markup
See what you keep, and what you add.
What you know
in US dollars
What the item costs you, ready to sell.
in US dollars
Your original price before sales tax.
What you get
36%
You keep $0.36 of every $1 in sales.
$45.00
per item
56.25%
of cost
36% margin56.25% markup
Understand the numbers
Markup starts with cost.
That same $45 is 56.25% of the $80 cost. Margin and markup describe different relationships.
(Price − Cost) ÷ Cost × 100