Garment Profit Margin & Markup Calculator — Order Profitability %
Understanding the mathematical difference between profit margin and cost markup prevents pricing errors during apparel contract negotiations.
What is Profit Margin vs Markup?
Understanding the mathematical difference between profit margin and cost markup prevents pricing errors during apparel contract negotiations.
Formula
Profit Margin % = [(FOB Selling Price − Total Cost) / FOB Selling Price] × 100 Cost Markup % = [(FOB Selling Price − Total Cost) / Total Cost] × 100
How to Calculate
Subtract total cost from FOB price to find net profit per piece. Divide profit by selling price for margin %, or by total cost for markup %.
Example
Total Cost = $5.20, FOB Price = $6.50 → Profit = $1.30 / pc → Margin = (1.30 / 6.50) × 100 = 20.0% → Markup = (1.30 / 5.20) × 100 = 25.0%.
Frequently Asked Questions
Markup divides profit by a smaller base (total cost), whereas profit margin divides profit by a larger base (selling price).