Margin vs. Markup
Margin = (Revenue − Cost) / Revenue × 100
Markup = (Revenue − Cost) / Cost × 100
Margin is the percentage of the selling price that is profit. Markup is how much more than cost you charge. A 50% markup yields a 33.3% margin.
Frequently Asked Questions
What's a good profit margin? It depends on industry. Retail: 2-5% net. Software: 20-40% net. Restaurants: 3-9% net. Luxury goods: 10-20%+.
Margin vs. markup — which should I use? Margin is better for analyzing profitability. Markup is more intuitive for pricing. Convert between them using the table above.