Markup vs Margin — What's the Difference?

These two terms are often confused, but they calculate profit differently:

  • Markup = (Selling Price − Cost) ÷ Cost × 100. Example: Cost $100, sell for $125 → Markup = 25%
  • Margin = (Selling Price − Cost) ÷ Selling Price × 100. Example: Cost $100, sell for $125 → Margin = 20%

Markup is always higher than margin for the same profit amount. When quoting customers, margin gives you a clearer picture of actual profitability as a percentage of revenue.

Freight Industry Benchmarks

  • LTL freight broker: 15-25% margin (typical)
  • FCL ocean freight: 10-20% margin
  • Air freight: 15-30% margin
  • Last-mile / same-day: 10-20% margin
  • 3PL warehousing: 20-35% margin
  • Customs brokerage fees: Flat fee or 5-15% of duty amount