Margin vs Markup

Margin vs Markup

Margin vs Markup

The difference between margin and markup is that margin refers to sales minus the cost of goods sold (COGS), while markup refers to the amount by which the cost price of a product is increased to determine the selling price.

 

Margin

Unit Price = Unit Cost / (1 – Margin %)

Example

Margin = 15%

Unit Cost = $2.50

Unit Price = $2.50 / (1 – 0.15) = $2.50 / 0.85 = $2.9411

 

 

Markup

Unit Price = Unit Cost *(1 + Markup %)

 

Example

Markup = 15%

Unit Cost = $2.50

Unit Price = $2.50 * (1 + 0.15) = $2.50 * 1.15 = $2.875     


    • Related Articles

    • Material Price for Parts

      Material Price for Parts How does SecturaFAB calculate how much do I change for material. Material Cost The weight or area of a part is used to determine the material cost portion of the line-item cost. The rectangular weight of a part will be used ...

    • Cost Model

      Setup > Preferences & Costs > Quote Details > Cost Model Different costing models can be used to calculate the quote labor costs.  Options : Labor Rate or Cost with Margin Labor Rate Whit the Labor Rate option selected the unit cost and unit price of ...

    • Margin

      Setup > Preferences & Costs> Quote Details > Margin Default Setting Set the default Margin or Markup for calculating the price for a quote or order item. The Margin or Markup is applied to a quote after the Material and Operation Costs have been ...

    • Material Margin

      Setup > Preferences & Costs >Quote Details >Material Margin Default Setting Set the default Material Margin for calculating the price for a quote or order item. Note: Depending on the Profit Model this will be a Margin or Markup value. When ...

    • Component Pricing Explained

      Component Cost to Price Calculation   Calculating to Price for a component that has a Hardware margin/markup and a Global margin/markup.   Unit Cost = Max(Min Unit Cost, Raw Unit Cost) Unit Adjusted Cost = Unit Cost * Hardware Markup Unit Price = ...