What it calculates
Use the result as a scenario, not a black box
Wholesale operators often talk about margin and markup interchangeably even though they answer different questions. Margin shows gross profit as a share of selling price. Markup shows gross profit relative to cost. Seeing both helps purchasing, manufacturing and sales teams use the same math.
How the math works
Revenue = wholesale price × units. COGS = unit cost × units. Gross profit = revenue − COGS. Gross margin = gross profit ÷ revenue. Markup = (wholesale price − unit cost) ÷ unit cost.
Example
At a $12 unit cost and $20 wholesale price, 1,000 units generate $20,000 of revenue and $8,000 of gross profit. Gross margin is 40%, while markup on cost is 66.7%.