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Margin vs mark-up: the mistake that costs small shops money
Why 50% mark-up is not 50% margin, with a simple table you can check by hand.
Last reviewed 2026-11-11
Mark-up is profit divided by cost. Margin is profit divided by price. They are never the same number unless the profit is zero.
- Cost 100, price 150: mark-up 50%, margin 33%.
- Cost 100, price 200: mark-up 100%, margin 50%.
- To keep a 50% margin you need a 100% mark-up.
The mix-up matters most when a supplier tells you a mark-up and your accountant talks about margin. Pick one and use it everywhere. Most owners find margin on price easier, because it tells you how much of each sale you keep.