Margin vs. markup

Profit = price − cost. Margin = profit ÷ price × 100. Markup = profit ÷ cost × 100. A product that costs 50 and sells for 80 has a 37.5% margin but a 60% markup.

Business owners use margin to see how much of each sale is profit and markup to set prices from costs. Add overhead and taxes separately to see net profit.