Margin vs Markup: What's the Difference?
Both margin and markup are used to measure a business's profitability, but they represent two different perspectives.
Gross Margin
Margin is your profit based on the Selling Price (Revenue). It tells you what percentage of the selling price is actual profit.
Formula: ((Revenue - Cost) / Revenue) × 100
Markup
Markup is your profit based on the Cost Price. It shows how much more you charge compared to what you paid for the item.
Formula: ((Revenue - Cost) / Cost) × 100