✅ Understanding Profit Margin, Markup, and Selling Price (With Example Table) When you run a business, knowing how to correctly price your products is essential. Two of the most common pricing metrics are profit margin and markup. Although people often mix them up, they are not the same thing. Let’s break it down using the example above, where every product has a €40.00 buy cost. ✅ 1. Profit Margin % Profit margin shows how much profit you earn as a percentage of the selling price. Example: Buy Price: €40.00 Profit Margin: 25% Sell Price becomes €53.33 Profit earned: €13.33 Formula: Sell Price = Buy Price / (1 − Profit Margin) ✅ 2. Sell Price This is the final price you charge the customer after applying the profit margin. You can see how the selling price increases as the margin goes up. Example: 10% margin → €44.44 selling price 40% margin…
