Markup and margin are two percentages of one profit
At a cost of 4 000 ₸ and a price of 10 000 ₸ the profit is 6 000 ₸: markup 150%, margin 60%. A 20% discount cuts the price to 8 000 ₸ and the profit to 4 000 ₸ — a third, not 20%.
Why the two percentages differ
Suppliers speak in markup. A discount is taken off the price. The cost does not shrink.
What to enter
- Your cost and the price you actually charge.
- The discount you already promise.
- Fees and returns go in product economics, not here.
Worked inputs, not a Kazakhstan average: cost 4 000, price 10 000, discount 20%.
What you learn
What we found
One profit, two percentages.
Why it matters
A discount off the price cuts tenge harder than the discount rate.
What to do
Calculate both, then the discount.
Markup, margin and a discount
Markup divides profit by cost. Margin divides the same profit by price. A discount cuts the price, not the cost. Fees, delivery and ads belong in product economics.
If you do not want to check this by hand, aVtonomus will show it in the analysis.
Common questions
How is markup different from margin?
Markup divides profit by cost. Margin divides the same profit by price.
Does a 20% discount cut profit by 20%?
Not in the worked example. Profit falls from 6 000 to 4 000 because the cost is unchanged.
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