Markup vs Margin
Markup and margin describe profit from different starting points. Confusing them can cause a quote to look profitable while producing less profit than expected.
Markup
Markup is profit added to cost. A 25% markup means selling price equals cost multiplied by 1.25.
Margin
Margin is profit divided by selling price. A 20% margin requires a higher selling price than a 20% markup on the same cost.
Why it matters
Use one consistent convention in quoting and communicate it clearly across sales and production.