Question 1

What is the difference between markup and margin?

Accepted Answer

Markup is based on cost price (Markup = (Sell-Cost)/Cost × 100%). Margin is based on selling price (Margin = (Sell-Cost)/Sell × 100%). A 50% markup ≠ 50% margin.

Question 2

How do I calculate markup from margin?

Accepted Answer

Markup = Margin ÷ (1 - Margin). For example, 30% margin = 0.3/0.7 = 42.86% markup.

Question 3

How do I calculate margin from markup?

Accepted Answer

Margin = Markup ÷ (1 + Markup). For example, 50% markup = 0.5/1.5 = 33.33% margin.

Question 4

What is a good profit margin for ecommerce?

Accepted Answer

Average ecommerce margins range from 10-20%. Luxury goods can have 40%+ margins. Anything above 20% is considered healthy for most online retail.

Question 5

Why do markup and margin get confused?

Accepted Answer

Both measure profitability but from different bases. A 100% markup means selling at 2× cost with 50% margin. Using them interchangeably causes pricing mistakes.

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