Mark up vs. Margin (or gross profit)

This tidbit comes from Barry via the Worldpac forum.

For years we have tried to teach our staff and our customers the difference between Mark up and Margin. The following seems to me the most concise way of explaning it.

"Gross Profit (or Margin) is the dollars you have left after you have paid for what you have sold. 50% Gross Profit is actually you keeping 50% of what you sold the item for. In other words, gross profit is what you want, markup is just the calculation. So, if you want 50% G.P., you have to mark it up by 100%. Another way of saying it is that markup is a verb (what you need to do) and gross profit is a noun (what you need to get)."