No. Hoops uses markup-based pricing, not margin-based pricing.
However, markup and margin are simply two different ways of expressing the same pricing outcome.
They are mathematically linked, which means you can achieve any desired margin by applying the appropriate markup
In practice, this means there is no pricing result that can be achieved with margin that cannot also be achieved with markup.
Markup vs Margin
Although the terms are often used interchangeably, they measure profitability from different perspectives.
Markup measures how much is added to the cost price.
Margin measures how much profit remains in the selling price.
For example:
Cost | Markup | Sell Price | Margin |
$100 | 100% | $200 | 50% |
In this example:
The product is marked up by 100%
The resulting gross margin is 50%
Both figures describe the same pricing outcome from different angles.
Why Hoops Uses Markup
Markup is generally easier to apply when building automated pricing rules because it starts with the known cost price of a product and calculates the selling price directly.
This makes it particularly effective for supplier-based catalogs where product costs may vary by quantity, supplier, or decoration method.
Once the selling price has been calculated, Hoops automatically displays the resulting margin throughout the quoting process, giving you complete visibility into the financial outcome.
Common Margin to Markup Conversions
If your business works with target margins, you can simply configure the equivalent markup.
Desired Margin | Equivalent Markup |
30% | 42.86% |
40% | 66.67% |
50% | 100% |
60% | 150% |
70% | 233.33% |
75% | 300% |
80% | 400% |
For example:
A 50% margin requires a 100% markup.
A 60% margin requires a 150% markup.
A 70% margin requires a 233.33% markup.
Once configured, Hoops will automatically produce the corresponding margin result.
Example
If a product costs $100 and you apply a 150% markup:
Cost | Markup | Sell Price | Margin |
$100 | 150% | $250 | 60% |
The markup is 150%, but the resulting gross margin is 60%.
This demonstrates that the desired margin is achieved through the markup rule.
Transparency Throughout the Quote
While Hoops uses markup for pricing calculations, the resulting profitability is always visible through the Revenue Summary and pricing tools throughout the quoting process.
This gives you complete transparency into:
Revenue
Cost
Gross Profit
Gross Margin
allowing you to confidently price products while still working toward your desired margin targets.
See Also: