Gross profit vs markup
Plain-English explanation of gross profit, GP percentage and markup.
What Gross profit vs markup means
Gross profit is profit after direct costs, shown as a share of selling price. Markup is profit added on top of cost. They are related but not the same, so mixing them up can cause pricing errors and hidden margin leakage.
Why it matters
A pricing mistake here can make owners think margin is stronger than it really is.
An example
A product that costs $60 and sells for $100 has $40 gross profit, 40% GP and a 66.7% markup on cost.