What is the difference between Markup and Profit Margin?
Markup is profit as a % of cost; margin is profit as a % of selling price. A 50% markup ($60 → $90) equals only a 33% margin. Retailers price by markup but report by margin.
Calculate profit margin, markup percentage, and net profit from revenue and cost. Essential for pricing strategy and business planning.
Profit Margin = (Revenue − Cost) / Revenue × 100. Markup = (Revenue − Cost) / Cost × 100.
An item that costs $60 and sells for $100 has a 40% profit margin but a 66.7% markup — margin and markup are not the same number.
Markup is profit as a % of cost; margin is profit as a % of selling price. A 50% markup ($60 → $90) equals only a 33% margin. Retailers price by markup but report by margin.
Break-even price = (Cost + Fixed Cost per Unit) ÷ (1 − variable fee % − payment fee %). Example: $20 cost, 15% Amazon fee, 2.9% Stripe fee → $20 ÷ (1 − 0.179) = $24.36 minimum.
Healthy DTC brands run 10–20% net margin; sub-5% is thin and risky, 20%+ is excellent. Dropshipping typically nets 10–15% after ad spend.
Landed Cost = Unit Cost + Shipping + Duty + Insurance + Broker/Handling Fees, all divided by units. Use landed cost — not FOB cost — for margin and pricing decisions.
Break-even units = Fixed Costs ÷ (Selling Price − Variable Cost per Unit). $5,000 fixed / ($40 − $25) = 334 units/month to break even.