Assuming that the purchase price is 1, according to the meaning of the question,

Then the bid price is 1+20%= 120%.

It will be sold at a 20% discount, so the price is: 120%×0.8=96%.

So the loss will be = 1-96%=4%.

A commodity is priced at a profit rate of 20% first. If you sell it at a 20% discount, you will lose (4)% when it is sold out.