Method and assumptions
Margin divides profit by selling price, while markup divides profit by cost. The two percentages answer different pricing questions and should not be used interchangeably.
Gross profit per unit = selling price - all unit costs. Margin = profit / selling price. Markup = profit / unit cost.
Common questions
Is a 50% markup the same as a 50% margin?
No. A 50% markup on a cost of 20 gives a price of 30 and a margin of 33.33%.
Should shipping be included in unit cost?
Include variable shipping or fulfillment when it is incurred for each unit sold.
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