vault backup: 2026-03-20 16:29:51

markup-vs-margin.md

@@ -1,13 +1,13 @@
 ---
 id:
 aliases: []
+title: Markup vs. Margin
 tags:
   - authorship/original
   - destiny/permanent
-  - type/encyclopedia
   - status/complete
+  - type/encyclopedia
   - type/encyclopedia-entry
-title: Markup vs. Margin
 dg-publish: true
 ---
 # Markup vs. Margin
@@ -24,7 +24,7 @@ $$
 \text{Markup} = \frac{\text{Profit}}{\text{Cost}}
 $$
 
-**Margin** describes an item's profit as a fraction of its sell price,
+**Margin** describes an item's profit as a fraction of its **sell price**,
 its cost to the customer.
 
 $$
@@ -38,19 +38,20 @@ Suppose a product that
 * is sold for $100
 
 $$
-\text{Profit} = 100 - 80 = 20, \quad
-\text{Markup} = \frac{20}{80} = 25\%, \quad
-\text{Margin} = \frac{20}{100} = 20\%
+\text{Profit} = \$100 - \$80 = \$20, \quad
+\text{Markup} = \frac{(\$20)}{\$80} = 25\%, \quad
+\text{Margin} = \frac{(\$20)}{\$100} = 20\%
 $$
 
-Contractors (and sellers of products and services in general)
-almost exclusively talk about profit in terms of margin.
-Even if someone says "15% _markup_"
-they may still be talking about margin.
-
 ## Converting Between Markup and Margin
 
 $$
 \text{Margin} = \frac{\text{Markup}}{1 + \text{Markup}}, \quad
 \text{Markup} = \frac{\text{Margin}}{1 - \text{Margin}}
-$$
+$$
+
+> [!warning]
+> Contractors (and sellers of products and services in general)
+> almost exclusively talk about profit in terms of margin.
+> **Even if someone says "15% _markup_"**
+> **they may still be talking about margin.**