When working with new producers, I notice there are many questions around margins and mark-up. Many people are confused, and use the terms interchangeably, but there is a difference.
Mark-up is how much a retailer “marks up” a product from the wholesale cost. For example, if a retailer keystones, she or he is doubling, or using 100% mark-up. In other words, marking up 100% on the WHOLESALE PRICE.
Margin is something different, and the more important and relevant term. Margin refers to a percentage of the RETAIL PRICE. So using the keystoning example, if you double the wholesale price, your MARGIN is 50% (of the retail price). The retail industry uses margins for virtually all their financial analysis and other factors, so when we (or buyers) mention a percentage margin, we are talking about a percent (i.e. margin) of the RETAIL price.