The Gross Profit Margin and Mark-Up are two different calculations used for businesses when calculating a product’s cost, price, or profit margin. Below we will see each one in detail:
Gross Profit Margin (GPM)
The Gross Profit Margin is calculated by subtracting direct expenses or the cost of goods sold from net sales (gross revenues minus returns, allowances, and discounts). That number is divided by net revenues, then multiplied by 100% to calculate the gross profit margin ratio.
You can set up your company’s GPM by going to Setup > Settings > Finantial Settings, you can set the GPM for a specific customer, or you can also set a K2K GPM for K2K E-Commerce Sales.
Mark-Up
A predetermined amount is added or subtracted from the cost to determine the selling price to cover overhead expenses and profit.
There are several types of Markups you can set in the system; if you want to learn more about a specific type of Markup, select it from the list below:
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