Unit economics on Uzum: margin, markup, ROI and break-even price
Unit economics answers one question: does one unit of product make money. If one sale is a loss, more sales only mean a bigger loss.
Markup and margin are not the same
- Markup = (price − cost) ÷ cost.
- Margin = (price − cost) ÷ price.
A product costing 60,000 UZS and sold for 120,000 gives a 100% markup and a 50% margin. But that is not yet profit: commission, logistics, packaging, ads and tax are still to be deducted.
Example of one sale
Product price 120,000 UZS (figures are approximate):
- Cost price: 60,000
- Commission (20%): 24,000
- Logistics: 6,000
- Packaging: 2,000
- Ads (DRR 8%): 9,600
- Tax (about 4%): 4,800
- Net profit: 13 600
Net margin is 11.3%, and ROI is 13,600 ÷ (60,000 + 2,000) ≈ 22%. Behind a "100% markup" there is only 11% net margin.
Break-even price
The price must cover the percentage items (commission, ads, tax), and the rest covers fixed costs:
Break-even price = fixed costs ÷ (1 − commission − ad share − tax share)
In our example: fixed costs 68,000 (cost + logistics + packaging), percentages 20% + 8% + 4% = 32%. Break-even price = 68,000 ÷ 0.68 = 100,000 UZS. Below this price every sale is a loss.
What is easy to forget
- returns: a returned product may not bring the commission back, and the logistics are already spent;
- a promo code discount does not reduce the commission (example);
- paid storage if turnover is above 60 days (rules);
- defects and losses: add 1–3% to the cost price.
Decision rules
- If net margin is below 10%, there is no room for ads and promotions.
- Think of ROI per turnover, not per year: if 22% comes back in two months, the yearly result is very different.
- Before raising the price calculate the break-even price, before lowering it calculate the new margin.
To calculate the price taking packaging size and commission into account — Profit calculator. For the price formula — How to calculate the price on Uzum.
