In plain English
Buy at $100, sell at $150. You made $50. As a share of the $100 cost that is 50% markup. As a share of the $150 sale it is 33% margin.
Suppliers and pricing talk in markup. Banks, lenders and financial statements talk in margin. You need both, and you need to know which one someone means.
Example
A 100% markup is a 50% margin. A 50% markup is a 33% margin. A 33% markup is a 25% margin.
Why it matters
Operators who quote markup and budget with it as if it were margin consistently overestimate profit, often by a third.
COMMON MISTAKETelling a lender you run 50% margins when you actually run 50% markup.