What is Markup?
Markup shows how much more you sell a product for compared to its cost, as a percentage. It is not the same as margin — confusing the two is one of the most common mistakes.
Formula
Example
If you purchased a product for $30 and sell it for $50, markup = (($50 - $30) / $30) × 100 = 66.7%. The margin on the same product = (($50 - $30) / $50) × 100 = 40%.
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Related Terms
Gross Margin
Gross margin is the difference between revenue and COGS, as a percentage. With the median e-commerce net profit at 3%, this number determines viability.
Margin vs. Markup
Margin shows profit as a share of revenue; markup shows it relative to cost. 100% markup = 50% margin. Confusing them leads to wrong pricing and false profit pictures.
COGS (Cost of Goods Sold)
COGS is the direct cost of products sold: purchase price + inbound shipping + duties. The landed cost is the number you actually need to know.
Net Margin
Net margin is the profit percentage remaining after all costs (COGS, ads, shipping, operations). The e-commerce median is just 3% — every percentage point matters.