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Designer Finances

Markup vs. margin: what's the difference?

Understanding the difference between markup and margin and how each affects your product pricing.

Written By Julia M.

Overview

Markup and margin both add profit to cost, but they're calculated differently. The same percentage gives a different price.

Markup

Client price = Cost × (1 + Markup %)

Cost $1,000 at 30% markup → $1,300. Profit $300, which is 30% of cost.

Margin

Client price = Cost ÷ (1 − Margin %)

Cost $1,000 at 30% margin → $1,428.57. Profit $428.57, which is 30% of the price.

Method

Cost

Client price

Profit

30% markup

$1,000

$1,300.00

$300.00

30% margin

$1,000

$1,428.57

$428.57

Where they live in Workroom

  • Line items use a markup percentage (Mkup (%)) on each line.

  • The studio default markup is FF+E markup in Settings → Studio → Money → Rates and accounts (overridable per project). It applies to new lines only.

  • Target margins on the same tab (Design fee, FF+E, Freight, Warehousing) are for reporting — changing a target never changes a price.

  • The estimate/invoice summary bar (Show Details) shows both Markup and Margin, and the quick view panel's Cost Analysis shows Gross Profit and Margin.

Money → Rates and accounts with FF+E markup and tax defaults

Tips

  • Pick one method and use it consistently so projects are comparable.

  • Keep Markup / Margin off in Client View unless you intend to show it.

Related articles

  • How to set up fees, payment schedule, and terms on an estimate

  • How to configure the client view on an estimate

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