Margin vs markup: the sum almost everyone gets wrong
A 30% markup on cost is not a 30% margin — it is 23%. Calculate both, see the selling price and learn why that gap drains cash every month.
Margin vs markup: the calculation almost everyone gets wrong
Adding 30% on top of cost does not give you a 30% margin. It gives 23%. That gap leaves your pocket every month unnoticed.
You entered a markup. The margin left is smaller than the number you typed.
Frequently asked
What is the difference between margin and markup?
Markup is calculated on cost; margin is calculated on the selling price. A product costing $10 sold for $13 has a 30% markup and a 23% margin. Same price, read two different ways.
Why doesn't a 30% markup on cost give 30% profit?
Because the base changes. The 30% was calculated on $10, but the $3 profit is compared against the $13 that actually hit the till. Confusing the two means working on a smaller margin than you think.
This is the pocket version
The tool above solves one calculation. What I do under contract is keep it running inside your system, on your data, with nobody typing anything.