The simple difference
Markup compares profit with your cost. Margin compares profit with your selling price.
A quick example
If something costs 40 and sells for 65, the profit is 25. Markup is 25 ÷ 40 = 62.5%. Margin is 25 ÷ 65 ≈ 38.5%.
Which should you use?
Margin is useful when thinking about how much of each sales rupee or dollar remains after direct cost. Markup is useful when deciding how far above cost to set a selling price.
Avoid the common mistake
A 50% markup does not produce a 50% margin. Always confirm which percentage you are using when pricing or reporting profitability.
Useful formulas
Profit = selling price − cost. Markup % = profit ÷ cost × 100. Margin % = profit ÷ selling price × 100. Target selling price for a desired margin = cost ÷ (1 − margin rate).