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Profit margin versus profit markup, or margin on selling versus markup on cost, is a distinction that is often misunderstood by small business owners, contractors, consultants, as well as employees in large corporations. With painful consequences! Margin versus markup is a fundamentally different approach to pricing and profitability. Let me walk you through the calculations and the underlying thinking. If you like my story and the explanation is helpful, then please press the like button below the video. Letamp;#39;s go! We are going to walk through the calculation of profit margin versus profit markup. In this example, letamp;#39;s take a revenue for your product or service of $100, a cost of $80, and a profit of $20. In both the margin and the markup calculation, the profit of $20 is the numerator in the equation. However, what you take as the denominator is different! When you calculate margin, you divide profit by revenue. When you calculate markup, you divide profit by cost. So
