Confusing markup with margin is one of the most common and expensive pricing errors in the joinery trade. Here's what they actually mean.
Markup is applied to cost. Margin is measured against revenue. If your job costs $8,000 and you apply a 30% markup, you quote $10,400. Your gross margin on that job is ($10,400 − $8,000) ÷ $10,400 = 23.1%. You targeted 30%. You achieved 23.1%. On every job.
Most profitability benchmarks and accounting conversations use gross margin, not markup. If you're targeting a 30% margin using a 30% markup calculation, you're consistently underperforming your own target without knowing it. Over 50 jobs a year, the gap between 23% and 30% gross margin is significant.
To achieve a target gross margin, use: Quote price = Cost ÷ (1 − target margin). For a 30% margin: $8,000 ÷ 0.70 = $11,428. Compare: 30% markup gives $10,400. The $1,028 difference per job adds up.
There is no universal correct margin — it depends on your cost structure, overhead burden and market. As a rough guide for joinery businesses: under 20% is difficult to sustain; 20–28% is viable but thin; 28–35% is healthy; 35%+ gives you room to absorb problems. The joinery.io job costing calculator shows your actual margin on every job once you start tracking.
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