Скачать или смотреть Margin VS Markup | Understand The Difference And How To Calculate It

#MarginVSMarkup #profitmarginexplained #howtocalculateprofitmargin

In today’s video, I will explain the profit margin and markup and what the difference between them is. Understanding the difference between profit margin and markup is crucial when calculating your net profit, as you will learn that margin refers to a different figure from markup.

A lot of people believe that profit margin and markup are the same. Even some people that have been in business for years might still confuse markup for margin.

Let me explain to you what is profit margin and markup separately and how to calculate profit margin and profit markup -

Profit markup: it is the amount that you add to the cost price of your product. For example, if your product cost is $100 and you mark it up 20% to sell it for $120, your markup is 20%

Now, let’s calculate the profit margin for the same example: To calculate profit margin, we divide the net profit by your revenue that is 20 / 120 = 16.66% meaning we have more than a 3% difference between the profit margin and the profit markup.

Also, notice that the profit margin is always lower than the markup and this small difference can affect your numbers significantly.

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