Markup vs margin — the costly mix-up
Markup is profit as a percentage of cost. Margin is profit as a percentage of the selling price. They are never the same number.
Buy at ৳800, sell at ৳1,000: profit ৳200. Markup = 200 ÷ 800 = 25%. Margin = 200 ÷ 1,000 = 20%. A shop owner who "adds 25%" and thinks they make 25% is wrong by a fifth.
- Margin = Markup ÷ (100 + Markup) × 100
- Markup = Margin ÷ (100 − Margin) × 100
- Price for a target margin = Cost ÷ (1 − Margin)
Stacked discounts don't add up
"20% off + extra 10%" is not 30% off. The second discount is taken from the already-reduced price: 100 → 80 → 72, so the real discount is 28%.
How much discount can you afford?
Every 10% you take off the price comes straight out of your margin. At a 20% margin, a 10% discount halves your profit per item — you need to sell twice as many to earn the same. The target-profit tab shows the biggest discount you can give before you start losing money.
Eleven POS
elevenpos.online