Which one should I track?

Margin. It's what you keep from each sale, and it's what retailers, investors and your accountant talk about.

What margin should a fashion brand aim for?

It depends on your channels. Selling wholesale means giving the store about half the retail price, so brands that sell wholesale need a higher margin at full price to leave room.

Is gross margin the same as margin?

Gross margin is margin after the cost of goods sold, usually across all your sales for a period, rather than on one product.

Guide · reviewed October 2026

Margin vs markup

Mixing them up is the most expensive typo in fashion.

Margin is what you keep as a share of the selling price. Markup is what you add as a share of the cost. Same deal, different number: a 50% markup is only a 33% margin.

The formula

margin = (price − cost) ÷ price markup = (price − cost) ÷ cost price for a target margin = cost ÷ (1 − margin)

Worked example

Cost $40, selling price $100:

Profit per unit	$60
Margin (60 ÷ 100)	60%
Markup (60 ÷ 40)	150%

Keystone pricing (doubling your cost) is a 100% markup, which is a 50% margin.

Worth knowing

Quick conversions: 50% markup = 33% margin · 100% markup = 50% margin · 150% markup = 60% margin · 200% markup = 67% margin.
Work both out from landed cost, not the factory price.

Common mistakes

Quoting a markup when a buyer or investor asks for margin.
Targeting a 50% margin with a 50% markup, and ending up at 33%.

Questions

Which one should I track?: Margin. It's what you keep from each sale, and it's what retailers, investors and your accountant talk about.
What margin should a fashion brand aim for?: It depends on your channels. Selling wholesale means giving the store about half the retail price, so brands that sell wholesale need a higher margin at full price to leave room.
Is gross margin the same as margin?: Gross margin is margin after the cost of goods sold, usually across all your sales for a period, rather than on one product.

Sources

Mathematics for Retail Buying (Fairchild Books) · Bette K. Tepper and Newton E. Godnick
The standard textbook for retail math: markup, margin, IMU, markdowns and open-to-buy.
Ronnie Fieg on Kith's 15-Year Evolution (September 2026) · Complex
Kith's founder on buying to an 85–90% sell-through target and reported margins on brands it buys wholesale.

Checked October 2026. Rates and rules change; confirm duty and tariffs with a licensed customs broker. All sources

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