A business example
A retailer sells an item for ₹1,000 that cost ₹700 to purchase, ignoring tax and other costs.
Gross profit
₹1,000 − ₹700 = ₹300.
Margin
₹300 ÷ ₹1,000 = 30% of sales.
Markup
₹300 ÷ ₹700 ≈ 42.9% of cost.
What this shows
The same transaction has a 30% margin and roughly 42.9% markup because the denominator changes. Rent and payroll have not yet been deducted.
What it is often confused with
Gross margin and markup use different denominators; a markup percentage is not the margin percentage.
What to look at in your business
Use a consistent cost-of-sales policy when comparing products or periods.
Context and further reading
This entry explains the business term. The related guide below provides the next layer of context; any applicable legal test depends on the transaction and relevant period.
Kosha.Services · Updated 2 October 2026