Question 1

What is the difference between margin and markup?

Accepted Answer

Margin measures profit against the selling price; markup measures the same profit against the cost. A product that costs $10 and sells for $20 has a 100% markup but only a 50% margin.

Question 2

How do I price for a specific profit margin?

Accepted Answer

Divide your cost by one minus the target margin (as a decimal). For a 40% margin on a $60 cost: $60 ÷ (1 − 0.40) = $100.

Pricing Calculator