Profit margins and mark-Ups.

Profit Margins and Mark-ups 

By Robert Jex 

Margins

A profit margin is the % of money made after costs (eg: paying employees, taxes ect.) so, if I was to buy cheese at 1 dollar a slice, If I then sold it again for $2, then it was subject to 50c tax, and I gave 20c to my employees (cheese-packers), -$1 for the cost of buying cheese, then I would make 30c, or 30% profit margin. I have really lost money, so I add $1 to the price, increasing my profit to $1.20, which is 120% profit.

Mark Up:

If I bought cheese at $1, then sold it again, I would make nothing. (not including the margin) to start making money, I must add to the price, so I add $1, making a profit of $1.

a mark-up is when I increase the price to make profit, by including the price I bought the cheese for in the first-place.