Margin vs. Markup: The 1-Minute Guide to Pricing Your Products

Mixing up margin and markup is one of the most common mistakes new entrepreneurs make. It can lead to underpricing your products and losing profit even when sales are high.

The Quick Definition

  • Markup: The percentage added to the COST to get the selling price.
  • Margin: The percentage of the SELLING PRICE that is profit.

Example: If a product costs $70 and you sell it for $100, your Markup is 42.8%, but your Margin is only 30%. Confused? Use our Profit Margin Tool or Markup Calculator to get it right every time.

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