Markup vs Margin for Daraz Sellers Explained

Markup and margin both describe profit, but against different bases. Markup is profit divided by your cost. Margin is profit divided by the selling price. Mixing them up is one of the most common pricing errors.

Why Does the Difference Matter on Daraz?

Daraz fees are percentages of the selling price, so margin is the number that lines up with them. If you set a price by adding a markup to cost, you can end up with a margin much lower than expected once commission and taxes take their share.

Worked Example

Example: Store A buys an item for Rs 600 and sells it for Rs 900. Profit before fees is Rs 300.

• Markup: 300 divided by 600 = 50 percent.
• Margin: 300 divided by 900 = about 33 percent.

Now fees come off the price too. If Daraz lines take about 20 percent of price, that is Rs 180, and the profit shrinks to Rs 120 before packing. The true margin is about 13 percent, far from the 50 percent that "markup" suggested.

Common Mistakes

• Reading a 50 percent markup as a 50 percent margin.
• Setting the markup first and checking fees afterwards.
• Comparing your markup with another seller's margin.

Related Terms

Profit margin, break-even, commission. To go the other way, from a target profit to a price, use the selling price calculator.