Celestial Tech Limited

When I joined Celestial Tech I noticed that nobody was aware or understood the difference between profit mark-up and profit margin.

I tried to explain to my colleagues that we can work either with mark-ups or with margins, but we need to understand what we are talking about and use the correct terminology, especially not using the term margin for mark-up as then we have total confusion.

I promoted the idea of only using margins, as the profitability of companies, in general, is being judged on their net margin, not on their net mark-up. Furthermore, I explained that the mark-up method bears one fundamental risk that I have witnessed in Celestial Tech, that a Director of the company, for a project he conducted calculated a mark-up of 40% on the cost price and then after giving 35% discount on the offered price that he found justified, he was surprised that the project was running a loss.

The CEO got the news that I was trying to educate the staff about mark-ups and margins, and he instructed the staff not lo listen to my bullshit and continue with mark-ups, instead.

May be this is good news for customers, as they may get a good bargain if Celestial Tech continues to use the mark-up technique for their costing.

Any comment or contribution from your side?