What is margin %?
Margin % (profit margin on the price): What share of the price is left after the variable costs of one item: (price - cost) / price x 100. It is always smaller than the markup.
Margin % = (price - cost) / price x 100
Example
The same phone case: cost $5, price $8. The shop keeps $3 of every $8: a margin of 37.5%, while its markup is 60%. A 50% markup is only a 33.3% margin.
Made-up people and numbers from the cases of our course; the math is real.
A common mistake
Planning with a 50% markup and thinking "half of every sale is mine". Half of the price would be a 100% markup.
Try it with your own numbers: Markup vs margin calculator (free, no sign-up).
Practise this in block 1
Block 1 of Ownwise is free, with no account needed to start: short lessons on costs, margin and break-even, then a made-up case where you make the decisions. This term has its own lessons in block 2, part of the paid practice pack.