The same sale, two percentages
Suppose an item costs $40 and sells for $80. The gross contribution is $40. Gross margin divides that $40 by the $80 selling price, giving 50%. Markup divides it by the $40 cost, giving 100%.
Why the distinction matters
If you use a markup when a plan expects margin, the resulting price can be materially different. Label the input, keep the formula visible and avoid calling gross margin net profit.
What is still missing
A simple product cost may exclude overhead, owner time, refunds, tax and other operating costs. Use the result as one input to a broader pricing decision.