Gross margin compares gross profit with selling revenue. Markup compares gross profit with cost. Both can describe the same transaction, but they use different denominators and should not share the same percentage label.
The numbers below are a hypothetical buyer-entered scenario. They are not a quoted landed cost, a suggested retail price or a promised reseller return.
A complete worked example
| Goods cost per unit | $0.55 — hypothetical input. |
|---|---|
| Allocated extra landed cost | $0.20 — hypothetical input for the example. |
| Landed unit cost | $0.55 + $0.20 = $0.75. |
| Selling price input | $2.00 — a buyer assumption, not our retail recommendation. |
| Unit gross profit | $2.00 − $0.75 = $1.25. |
| Gross margin | $1.25 ÷ $2.00 × 100 = 62.5%. |
| Markup | $1.25 ÷ $0.75 × 100 ≈ 166.7%. |
Keep the selling unit consistent
Divide an order-level charge by the number of the same saleable units represented by that charge. If a product is quoted per calendar, do not divide it by an assumed number of loose toys. If a mixed shipment contains unlike selling units, record the allocation method and confirm the counts before calculating.
EXW product prices are not delivered prices. Enter the freight, duties, taxes, handling and other costs relevant to your own transaction rather than assuming the example’s $0.20 will cover them. A freight estimate is still an estimate until the shipment and terms are confirmed.
Check the result against another price input
| Hypothetical retail $1.50 | With landed cost $0.75, gross profit is $0.75 and gross margin is 50%. |
|---|---|
| Hypothetical retail $2.50 | With landed cost $0.75, gross profit is $1.75 and gross margin is 70%. |
| Fees and overhead | Marketplace fees, discounts, returns and operating expenses can reduce what remains. Track them separately. |
Use a dated worksheet
Save the quotation date, currency, selling unit, quantity and cost assumptions beside the formula. Recalculate when any of these changes. The editable margin calculator on product pages is a planning aid; its outputs depend on the values you enter.
Catalog source and next step
Product figures use the Squishy Toys Wholesale catalog snapshot supplied with this guide. Prices are indicative EXW and require current confirmation. Availability, shipment dates and cross-SKU mixing have not been confirmed.
Compare the current catalog and send a SKU-based quote request.