What's the difference between Margin, Markup %, and Markup Multiplier ?

Haylee Benton Updated by Haylee Benton

Learn what each term means and how it affects pricing within shopVOX

I hear you - I know the different terms in shopVOX can be confusing ๐Ÿ˜”

But sometimes the biggest offenders are not shopVOX specific ones.

Here's some that might trip you up.

  • Gross Margin
  • Markup %
  • Markup Multiplier

Example Scenario

The best way to learn the differences here are with scenarios - so let's use a simple one.

I sell a screen printed t-shirt for $7 to my customer. That shirt costs me $2 to buy and print.

Gross Margin %

Gross margin % is typically used to calculate how profitable a particular project is (before any taxes).

Here is our formula.

(Price - Cost) / Price = Gross Margin %

In the example above, our Gross Margin % would be 71.4%.ย 

(7 - 2) / 7 = .714285714 or 71.4%

That's a really solid number. The target range here would be 40% and above.

The thing is you won't see a lot of references to Gross Margin inside shopVOX.

When pricing your products - it's more popular to use one of the next two concepts.

Markup %

Markup is the amount you add to the cost to determine your selling price.

Cost + (Cost * Markup %) = Price

Gross Margin / Cost = Markup %

In the example above, our Markup % would be 250%.

(7-2) / 2 = 250%

Where will I see Markup % in shopVOX?

  • Integrated Apparel Catalogs
  • Custom Apparel Catalogs

Markup Multiplier

Markup multiplier is a simple multiplier used to determine your selling price.

1 + Markup % = Markup Multiplier

Cost x Markup Multiplier = Price

In the example above, our Markup Multiplier would be 3.5.

1 + 250% = 3.5

Where will I see Markup Multiplier in shopVOX?

  • Products
  • Materials
  • Labor Rates
  • Machine Rates

You'll see an X to the right that denotes a multiplier, instead of a percentage.

Margin vs Markup Chart

Download the PDF Version of the Chart

If you're like me - math can be your worst enemy after a long day.

So as a resource I've created this handy dandy chart to use when setting up your pricing within shopVOX.

Print yourself a copy asap.

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Re-Calculating Bill Of Materials (BOM)

How to adjust the bill of materials (BOM) for situational purposes