True or False: Markup and gross margin are the same concept.

Markup and gross margin are distinct concepts in retail and merchandising, making the statement false.

Markup refers to the amount added to the cost of a product to determine its selling price. It is typically expressed as a percentage of the cost price. For example, if a product costs $50 and is marked up by 40%, the selling price would be $70 ($50 x 1.40).

Gross margin, on the other hand, is a measure of profitability that indicates the difference between sales revenue and the cost of goods sold (COGS). It can be expressed as a percentage of sales revenue. Using the previous example, if the product sells for $70, the gross margin would be $20 (($70 - $50) / $70), which expresses the profitability concerning the selling price.

Understanding the differences between markup and gross margin is crucial for pricing strategies and financial analysis in merchandising, as they serve different purposes in evaluating product performance and overall profitability.