Accounting Glossary

Difference between margin and markup


Margin vs markup (comparison)

Margin and markup are two different ways of looking at your profit on a sale.

They both focus on the same amount of money – the difference between your buying and selling prices. And they both express that amount as a percentage. However, margin shows it as a percentage of income while markup shows it as a percentage of costs.

Your markup is always bigger than your margin, even though they refer to exactly the same amount of money.

Markup: Tells you how much you bump up the prices of the things you sell.

Margin: Tells you what percentage of income is gross profit.


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