--- title: What's the Difference Between Margin and Mark-Up? description: Pricing can be tricky, learn the basics of margin and mark-up in this introductory post on the subject. image: https://blog.thedigisource.com/hubfs/financial_contrasts.jpg --- [![digisource-logo](https://blog.thedigisource.com/hs-fs/hubfs/digisource-logo.png?width=144&height=40&name=digisource-logo.png "digisource-logo")](http://www.thedigisource.com/)         - [Visit SnapChip](http://snapchip.ai) - [Services](http://thedigisource.com/#pricing) - [About Us](http://thedigisource.com/#features) - [Blog](https://blog.thedigisource.com/) - [Contact](http://thedigisource.com/#subscribe) # What's the Difference Between Margin and Mark-Up? A common confusion in pricing is the difference between mark-up and margin. Here's a quick explanation of both. **Mark-up** is the percentage a cost is increased ("marked up") to determine a resale. For example, if an item costs $2.00 and the mark-up is 20%, the resale is $2.40 (the original cost plus the 20%). The simple calculation is the cost multiplied by the percentage + 1.  For example: $2.00 X 1.20 = $2.40 [![Find Alternates fast with AI](https://no-cache.hubspot.com/cta/default/9198804/interactive-159112852581.png)](https://blog.thedigisource.com/hs/cta/wi/redirect?encryptedPayload=AVxigLKjjnlyjSBxMEDVWWjZTafk6zyydOOyDxYh0%2F1aUbIeFLNHOfEGM%2BBBpFfAVV8ipEgz5%2BLKJKScVJ66BnzcggR2M9YWDEGGhaBkcjGLw8CVL8MA1waLZYydjSR4Ez8X%2B1sZ9dRKC5FY9VCDkuuw3whBCN%2Fa3z%2F3ofKh1DY2CsYlBV8%3D&webInteractiveContentId=159112852581&portalId=9198804) **Margin**, short for 'profit margin', is the percentage of a resale price that is profit. For example, if an item costs $2.00 and the profit margin is 20%, the resale is $2.50 (the profit of .50 is 20% of the $2.50 resale). The simple calculation is the cost divided by 1 minus the percentage. For example: $2.00 / (1-.20) = $2.50 Notice the different resales that result from applying mark-up or margin. While mark-up is common in some industries or applications, margin is by far the most commonly used pricing calculation in electronic contract manufacturing.                            [mailto:?body=https://blog.thedigisource.com/difference-margin-mark-up](mailto:?body=https://blog.thedigisource.com/difference-margin-mark-up) --- **MORE LIKE THIS** - [How AI Works](https://blog.thedigisource.com/how-ai-works) - [How To Prompt ChatGPT](https://blog.thedigisource.com/how-to-prompt-chatgpt) - [If Components Could Talk, What Would They Say?](https://blog.thedigisource.com/talk-to-components) ---   ## **Subscribe Now To Get The Latest**   ### KEEP READING [![How AI Works](https://no-cache.hubspot.com/cta/default/9198804/82b865a1-c66e-4d0b-b608-0376a96e49ba.png)](https://cta-redirect.hubspot.com/cta/redirect/9198804/82b865a1-c66e-4d0b-b608-0376a96e49ba) [![New call-to-action](https://no-cache.hubspot.com/cta/default/9198804/0766e1e6-8df8-4892-804a-4c9717d2d6d4.png)](https://cta-redirect.hubspot.com/cta/redirect/9198804/0766e1e6-8df8-4892-804a-4c9717d2d6d4) [![New call-to-action](https://no-cache.hubspot.com/cta/default/9198804/71996069-6ab0-4af6-97af-552d614d64ee.png)](https://cta-redirect.hubspot.com/cta/redirect/9198804/71996069-6ab0-4af6-97af-552d614d64ee) [![New call-to-action](https://no-cache.hubspot.com/cta/default/9198804/a0e606c8-bdd0-4a98-84b7-ebfba9ee734c.png)](https://cta-redirect.hubspot.com/cta/redirect/9198804/a0e606c8-bdd0-4a98-84b7-ebfba9ee734c) [![New call-to-action](https://no-cache.hubspot.com/cta/default/9198804/fefda005-e88e-431b-a958-5aff833c4184.png)](https://cta-redirect.hubspot.com/cta/redirect/9198804/fefda005-e88e-431b-a958-5aff833c4184) [![New call-to-action](https://no-cache.hubspot.com/cta/default/9198804/78ca670d-e2ae-47c8-97b2-669870441e79.png)](https://cta-redirect.hubspot.com/cta/redirect/9198804/78ca670d-e2ae-47c8-97b2-669870441e79) [![New call-to-action](https://no-cache.hubspot.com/cta/default/9198804/2e895b39-cb97-4ea8-bd53-a0b384d805a4.png)](https://cta-redirect.hubspot.com/cta/redirect/9198804/2e895b39-cb97-4ea8-bd53-a0b384d805a4) [![New call-to-action](https://no-cache.hubspot.com/cta/default/9198804/1715cdb4-dbe3-43f6-83f1-e38bb6217e9e.png)](https://cta-redirect.hubspot.com/cta/redirect/9198804/1715cdb4-dbe3-43f6-83f1-e38bb6217e9e) [![New call-to-action](https://no-cache.hubspot.com/cta/default/9198804/1347b74b-ee5d-47ba-b1c8-24a0bc648170.png)](https://cta-redirect.hubspot.com/cta/redirect/9198804/1347b74b-ee5d-47ba-b1c8-24a0bc648170) #### **RECOMMENDED** © 2026 DigiSource Inc. [![digisource-logo](https://blog.thedigisource.com/hs-fs/hubfs/digisource-logo.png?width=150&height=42&name=digisource-logo.png "digisource-logo")](http://www.thedigisource.com/)