Grounds ToolkitEstimating and Pricing
What Is the Difference Between My Markup and Actual Margin?
Enter cost and selling price. See gross profit, margin, and markup side by side, and why confusing the two quietly under-prices jobs.
How this is calculated
Gross profit is price minus cost. Margin divides that profit by price. Markup divides the same profit by cost. A $100 cost sold at $150 is a $50 profit, a 33% margin, and a 50% markup, the same dollar profit, two different percentages depending on what it's measured against.
Frequently asked questions
Why are margin and markup different numbers?
Margin is profit divided by price. Markup is profit divided by cost. Since price is always larger than cost on a profitable job, markup is always the larger percentage for the same dollar profit.
Which one should I use to set prices?
Margin, if your goal is a target percentage of revenue kept as profit. A common mistake is applying a markup percentage while believing it equals that margin, it does not.
What is a good gross margin for landscaping?
Broad industry benchmarks run roughly 30-50%, with mowing-heavy small operators often on the leaner end. See the Minimum Profitable Job Price calculator to work from a target margin to a price.
Next decision
Want to work from a target margin to a minimum price instead? UseMinimum Profitable Job Price.