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Discount and margin math every marketer needs

Black Friday "70% off" and your boss asks the margin. Brain freeze? It shouldn't. Four formulas solve everything. And a calculator puts them on autopilot.

4 min readUpdated on April 27, 2026

Almost every marketing, sales or e-commerce job revolves around 4 calculations: percentage of a value, what percentage something represents, change between two values, and profit margin. Master the 4 formulas and you'll never freeze again.

1. X% of Y

The simplest. "20% of $150" = (20/100) × 150 = $30. Use it for: sales commissions, tax on revenue, share of budget allocated to a channel.

2. X is what % of Y

Inverse of the first. "$30 is what % of $150?" = (30/150) × 100 = 20%. Use it for: market share (your revenue ÷ total market), conversion rate (purchases ÷ visitors), channel attribution (channel sales ÷ total sales).

3. Change between two values

"From $100 to $120, what's the change?" = ((120-100)/100) × 100 = +20% (increase). "From $100 to $80?" = ((80-100)/100) × 100 = -20% (decrease).

Use it for: month-over-month growth, year-over-year (YoY) comparison, pre/post Black Friday price change, user retention (month 2 ÷ month 1).

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4. Margin vs Markup (the classic confusion)

Both calculate profit, but in opposite directions. Confusing them has cost A LOT of money for a lot of people.

Margin (from selling price): profit ÷ selling price. Sell at $100, costs $60, profit $40. Margin = 40/100 = 40%.

Markup (from cost): profit ÷ cost. Same example: 40/60 = 66.7%.

Note: 40% margin ≠ 40% markup. When someone says "I need 50% margin", that's very different from "I'll apply 50% markup". For 50% margin, you need 100% markup (price doubles).

Conversion formula

  • Markup → Margin: margin = markup / (1 + markup)
  • Margin → Markup: markup = margin / (1 - margin)
  • Want 30% margin: markup = 30/(1-0.30) = 42.86%
  • Want 50% margin: markup = 50/(1-0.50) = 100%
  • Want 70% margin: markup = 70/(1-0.70) = 233%

Common e-commerce cases

"Free shipping over $50" — worth it?

If your average ticket is $35 and shipping costs you $7, the rule pushes the customer to add 1 more item. Ticket goes to $50 = +$15 revenue. You pay $7 shipping. Extra profit = $15 × your margin - $7. If margin is 40%, profit = $6 - $7 = -$1 per order. NOT worth it. Run the math first.

Stacked discounts (10% / 15% / 20%)

You don't add discounts. 10% + 10% ≠ 20%. $100 with 10% = $90, and 10% of $90 = $9. Total: $81 (19% off in the end, not 20%). Use the calculator to verify before communicating cumulative percentage.

Frequently asked questions

Because they solve similar problems (profit) and use the same word "percentage". But the base is different — one divides by price, the other by cost. Always ask: "percentage of what?" before accepting a number.