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Podcast: HVAC School - For Techs, By Techs
Episode: Margin, COGS, Markup & Profit Confusion - Short 123
Description: In today's short podcast, Bryan clears up the differences between markup and profit margins in HVAC businesses. The number one mistake that people make in business is confusing markup and gross margin. For example, you can double the price of a $50-part and sell it for $100. That would be a 100% markup. However, your gross margin is NOT 100%; your gross margin is only 50%; you only made a 50% profit on the total sale. In the same case you have above, you have a 50% cost of goods sold (COGS). COGS is the direct cost of the expenses you p...