Margin vs markup
Why a 50% markup is only a 33% margin.
Markup is added on top of costs. Margin is the share of the price you keep.
A job that costs $6,000:
- With a 50% markup, the price is $9,000. You keep $3,000, which is 33% of the price.
- At a 40% margin, the price is $10,000. You keep $4,000, which is 40% of the price.
Brushline prices to a margin because overhead and profit come out of the price, not the costs. Many owners who "add 50%" are earning a 33% margin and don't know it.
| Markup | Margin |
|---|---|
| 25% | 20% |
| 50% | 33% |
| 67% | 40% |
| 100% | 50% |