The numbers
How much you really keep from each sale
The full Argentine cost structure, the difference between markup and margin, and why the number almost everyone calculates is wrong.
5 min read4 partsFree
01The calculation almost everyone makes, and why it's wrong
Ask anyone how much they make per sale and they'll say: «I buy at 16 and sell at 40, I keep 24». It's correct and it's missing everything.
Five lines are missing, and they take the money before it reaches your pocket; together they can add up to thirty points. They aren't hidden costs or tricks: they're fees, taxes and the cost of selling in installments. They're in plain sight and almost nobody subtracts them.
The result is a business that thinks it has a 60% margin and actually has 29%. With that gap, everything that follows (how much it can pay for a sale, whether ads pay off, whether it can scale) comes out wrong.
02The missing lines
All percentages are on the selling price, not on the cost. The ranges vary with what each business negotiated and its tax situation, but this is the order of magnitude:
| Cost | Range | When it applies |
|---|---|---|
| Financing cost: 3 installments | 9% | If you offer interest-free installments |
| Financing cost: 6 installments | 17% | Same, and it hurts twice as much |
| Ingresos brutos (provincial gross-receipts tax) | 3% to 5% | Almost always; it varies by province |
| Payment gateway fee | 4% to 7% | Any electronic payment |
| IVA (VAT) | 10% to 15% | If you are a VAT-registered taxpayer |
| Advertising | 5% to 15% | If you run ads |
Do
- Take the number from your payment gateway statement, not from memory. It's almost never what you thought.
- If you sell in installments, check how much they really deduct: it's the biggest cost and the most ignored.
- Subtract all of this BEFORE deciding how much you can pay to get a sale.
Avoid
- Calculating the margin with the cost of goods alone.
- Offering 6 interest-free installments without doing the math. That 17% comes out of your margin, not out of thin air.
- Assuming VAT «evens out». Sometimes it does, sometimes it doesn't, and assuming it is what breaks the numbers.
This is a reference from professional practice, not a measured figure for the Argentine market. Use it as a guide and check it against your own numbers.
03Markup and margin: the most expensive confusion in the trade
Markup is calculated on the COST. Margin is calculated on the SALE. They are two different numbers and people use them as if they were the same all the time.
A 100% markup is a 50% margin, not 100%. You buy at $50 and sell at $100: you added 100% on top of the cost, and out of every $100 that comes in you keep $50. Markup 100, margin 50.
Whoever mixes them up gets everything that follows wrong, starting with the break-even ROAS, which comes from the margin and not from the markup.
| Markup on cost | Margin on the sale | Example |
|---|---|---|
| 50% | 33% | You buy at 100, sell at 150 |
| 100% | 50% | You buy at 100, sell at 200 |
| 120% | 54.5% | The typical floor in Argentina |
| 200% | 67% | You buy at 100, sell at 300 |
| 500% | 83% | You buy at 100, sell at 600 |
Do
- Markup = (price − cost) ÷ cost × 100
- Margin = (price − cost) ÷ price × 100
- When someone gives you a number, ask what they calculated it on. Half the time it's markup said as margin.
Avoid
- Using the markup to calculate the break-even ROAS. It gives an optimistic, false number.
- Comparing your «margin» with someone else's without checking that you're both talking about the same thing.
04What a good profit looks like in Argentina
After subtracting everything (goods, fees, taxes, financing cost and advertising), what's left is net profit. That's what you really take home from each sale.
Selling at $100 with the full structure, about $24 is left clean: 24% profit. And here are the references for what's healthy:
| Net profit | How to read it |
|---|---|
| Under 20% | Tight. Any surprise eats your month |
| 20% to 30% | Fine. You can operate and grow slowly |
| 30% to 45% | Very good. There's room to invest and to make mistakes |
| Over 45% | Excellent, or you forgot to count something |
This is a reference from professional practice, not a measured figure for the Argentine market. Use it as a guide and check it against your own numbers.
Case
Clothing brand
The owner says he has a 60% margin. He sells a T-shirt at $40,000 that costs him $16,000.
- The number he quotes is markup read wrong: (40,000 − 16,000) ÷ 16,000 = 150% markup. On the sale, the gross margin is indeed 60%.
- But the usual lines are missing: he sells in 3 interest-free installments (−9%), gross-receipts tax (−4%), payment gateway fee (−6%), VAT (−12%).
- That's 31 points that weren't counted. The margin before advertising is 29%, not 60%.
- With 29%, the break-even ROAS is 3.4, not 1.7 as he believed. He spent three months running ads at ROAS 2.5, convinced he was making money.
Same business, same numbers, opposite conclusion: he was losing money on every sale that came from ads. That's why SYB asks line by line instead of accepting a margin written from memory.