Throughout the Fresho app, we use Margin % to determine your profit and loss.
If you have a cost price entered, you will be able to view your expected gross profit on each line. Lines that you are making a loss on will turn red.
Margin = ((Selling Price - Cost Price) / Selling Price) x 100
Markup = ((Selling Price - Cost Price) / Cost Price) x 100
Margin % is based on the selling price and represents the percentage of profit earned on each sale, while markup % is based on the cost price and represents the percentage increase added to the cost price to arrive at the selling price.
As an example of Margin: If an item costs $1 then:
Sell Price
|
Margin
|
$1.25
|
20.00%
|
$1.50
|
33.33%
|
$2.00
|
50.00%
|
$3.00
|
66.67%
|
$4.00
|
75.00%
|
$5.00
|
80.00%
|
$100.00
|
99.00%
|
You can see using this table, to increase your cost price by half you will need to enter a 33.33% margin and to double your cost price you will need a 50% margin. You will also notice that no matter how high you go you will never reach over 100%, this is because anything equal to or above 100% is an infinite price.