Question 1

What is the difference between margin and markup?

Accepted Answer

Margin is profit as a percentage of revenue: (revenue - cost) / revenue. Markup is profit as a percentage of cost: (revenue - cost) / cost. A 50% margin equals a 100% markup.

Question 2

What is a good profit margin?

Accepted Answer

It varies by industry. Retail averages 2-5%, software 15-25%, and services 10-20%. Compare against your industry benchmark for context.

Margin Calculator — Calculate Profit Margins