Mark Up, Profit Margin 有咩分別 ?

The term"Markup" is often used by a retailer to define its profit of a product sale
Markup can be represented by dollar amount or in %
Markup calculations can be based on 1)retail, or 2)cost, but most often cases are based on retail calculation in HK
1)calculating a markup percentage on retail:
Markup% = (dollar markup/retail) x 100%
for example MU%= ($8 dollar markup/$18 retail) x100% = 44.4%
2) calculating a markup percentage on cost:
Markup%=(dollar markup/cost) x100%
for example MU%=($8 dollar markup/$10 cost) x100% cost=80%
The purpose of Markup is allowed the retailer a) to perform pricing & promtion strategies during selling seasons while ecountering rivals' competitors and market recessions. The strategies include initial, additional, & cumulative markups, & also markdown when needed;
b) to have an idea how much profit have been gained(how many goods have sold) and the value of the merchandise of balance inventory could be sold by stock taking from time to time, then identify if the gained profits and shall be gained profits whether can cover all operating expenses for net profits eventually.
Pofit Margins are often used by manufacturer for a profit calculation based on costs in a P&L statement.

Sale(retail price) minus cost of good sold= Gross Margin in a collective term (not for individual merchandise)
if it is not collective term, then they(dollar markup and gross margin) are the same
Gross Margin minus operating expenses(direct and indirect type)= net profit before tax






2008-03-31 23:28:09 補充：
rivals' competitors to be corrected as rivals' competitions

2008-04-01 09:34:30 補充：
Profit Margin%= [Net profit after tax/ sales(is Net Sales) ] x100%

that is Earn Per doallar amount sales


Net Sales= the gross sales after substracted any return inward(i.e. customer's return defective goods)

Mark up is the amount ( $8 )you added on the cost of the goods ($12) so as to put up the selling price ($20).
Gross Profit margin is in broad term also called Profit Margin. It is the gross profit i.e.{ [Sales $20 - Purchase(cost of the goods) $12]=Mark up cost $8} - direct costs(e.g. transportation $2, import declaration $1, selling expenses $2 etc..)= $3.

Mark Up, Profit Margin 有咩分別 ?
Mark Up 是以成本作單位而加上利潤之計算方法。
Profit Margin 是以售價作單位計算利潤之方法。
計算方法：
一件產品成本價為HK$100。
如以 20% Mark Up 計算 ：
HK$100 + 20% (HK$100) = HK$120
售價為HK$120
如以 20% Profit Margin 計算 ：
HK$100 / (100% - 20%) = HK$125
售價則為HK$125

希望解釋令你明白。