Margin: The percentage of revenue that is profit.
Markup: The percentage increase over the cost price.
Cost: $50
Revenue: $100
Margin: 50%
Cost: $90
Revenue: $100
Margin: 10%
Cost: $110
Revenue: $100
Margin: -10% (Loss)
Margin is based on revenue (sales price), while markup is based on cost. For example, if a product costs $50 and sells for $100, the markup is 100%, but the margin is 50%.
It depends heavily on the industry. A 10% net margin is generally considered average, 20% is good, and 5% is low. High-volume businesses (like grocery stores) often run on low margins.
No, profit margin cannot exceed 100% because profit cannot be greater than the revenue. However, markup can be infinite (e.g., if cost is $0).
If your cost is higher than your revenue, you are selling at a loss, resulting in a negative profit and margin.