The Mudcat Café TM
Thread #163398 Message #3898160
Posted By: Bee-dubya-ell
08-Jan-18 - 03:25 PM
Thread Name: BS: simple stuff we might not know
Subject: RE: BS: simple stuff we might not know
Similar to Branson's not knowing gross from net, many people don't know the difference between markup and profit margin.
If you buy something for $1.00 and sell it for $2.00, you're marking it up 100%, but you're not making 100% profit. You're making 50% profit. 50% of the $2.00 that goes into the cash register is profit, 50% is cost. The only way to make 100% profit is to pay nothing for what you're selling.
If you want to make 25% profit on an item, you don't mark it up 25%. That will only give you 20% profit. You mark it up 33.33%.