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Understand the numbers · Make life easier
Gross margin and markup
Distinguish gross margin from markup when comparing a selling price with product cost. Both percentages use the same profit but different denominators.
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Gross margin
33.33%
Gross margin divides profit by selling price; markup divides by cost. Other operating expenses have not been deducted.
Gross profit per item50 TWD
Markup50 %
Gross margin divides gross profit by selling price; markup divides it by cost. Other operating expenses have not been deducted.
Method and scope
Gross profit equals selling price minus cost. Gross margin divides profit by selling price, while markup divides profit by cost.
A negative gross profit means the selling price is below the entered product cost. Margin and markup should not be substituted for each other in a quotation.
Platform fees, payment fees, returns, advertising and fixed costs are excluded unless already part of the entered cost. Markup cannot be calculated when cost is zero.
What this helps you do
Distinguish gross margin from markup when comparing a selling price with product cost. Both percentages use the same profit but different denominators.
What to enter
Start with selling price (twd), then fill the other relevant fields in the units shown. The field hints explain the required format and examples.
How the calculation works
Gross profit equals selling price minus cost. Gross margin divides profit by selling price, while markup divides profit by cost.
Worked example
Selling an item for TWD 150 with TWD 100 cost gives TWD 50 gross profit. The margin is 33.33% and markup is 50%.
Understanding the answer
A negative gross profit means the selling price is below the entered product cost. Margin and markup should not be substituted for each other in a quotation.
Scope and limitations
Platform fees, payment fees, returns, advertising and fixed costs are excluded unless already part of the entered cost. Markup cannot be calculated when cost is zero.