I Was Mixing Discount and Markup for a Year
When I started my store, I bought a product for $80 and sold it for $100. I told everyone I made 20% markup. My friend who is an accountant laughed. He said it's 25% markup and 20% margin. I had no idea they were different.
Discount vs Markup - The Simple Difference
Discount: You Reduce the Price
Discount is for the customer. Original price $100, 20% discount = $80 sale price. You lower the price to sell more.
Markup: You Increase Your Cost
Markup is for you, the seller. Cost $80, 25% markup = $100 selling price. You increase the cost to make profit.
Why This Matters for Your Profit
If you confuse them, you price wrong. My advice: If you want to set a price, use markup. If you want to make a sale, use discount. On your phone, use a Discount and Markup calculator to see both instantly. Enter cost $80 and selling $100, it tells you 25% markup and 20% profit margin. No more confusion.
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