When using Mark-Up pricing, rather than Discount or Fee, Design Manager employs a calculation which bases the Mark-Up as a percentage of the cost from the Vendor rather than price which is known as Gross Margin or Gross Profit. The link here does a tremendous job of explaining the definitions and calculations of Mark-Up, Gross Margin, etc. even if the source is not from the design industry!

If the link above does not work, please see the attached PDF.