The gross margin percent of the ice cream parlor's ice cream sundaes equals 44.5 percent ($2.00 selling price - $1.11 total cost) = $0.89/$2.00 = 0.445) or 44.5 percent gross margin.

While the pricing margin is the portion of a products selling price that is your profit on that product, markup is how much you add to the cost of a product to get your selling price.

Therefore, if you paid $100 for an item that you sold for $150 (a 50 percent markup), the gross margin would be 33.3 percent = ($150 - $100) / $150.

Profit margin and markup show two aspects of the same transaction. Profit margin shows profit as it relates to a product's sales price or revenue generated. Markup shows profit as it relates to costs.

QUESTION: I’m working on pricing for the products I sell. I’m getting confused about the difference between gross margin and markup. Would you please explain this? Also, if I know ...