Margin vs. Markup: The Difference Explained

Margin vs. Markup: The Difference Explained

Understanding the difference between margin and markup is crucial for any business owner or financial planner. While both terms relate to pricing and profit, they denote different metrics of performance.

Margin is the difference between sales and the cost of goods sold, expressed as a percentage of sales. On the other hand, markup is the amount added to the cost of a product to determine its selling price.

For a deeper dive into how to effectively use these concepts, check out our Markup Tools and Margin/Discount Tools pages which provide additional insights and practical tools to enhance your pricing strategies.