Profit Margin Cheat Sheet
Traditionally, designers calculated their markups by taking THEIR cost, and multiplying it by .3 for 30%. What this gives you using $100 as an example, is $30. Makes sense, right? But with margin you get a profit of $142.85 which is $12.85 MORE in profit from the traditional way.
Although it is less important, let’s talk about mark up vs margin first. Many people use these terms interchangeably to mean the difference between what you pay for goods and what you sell them for – that is, gross profit. However, they are not the same thing. Misunderstanding the nature of markups and margins can make it easier to calculate them incorrectly – which cuts deeply into your bottom line. Download our profit margin cheat sheet!