Definition
Partner gross profit is the money a partner actually keeps from selling a vendor's product and related services after paying its direct costs. It includes product margin, rebates, incentives and service revenue, minus costs like the product price, labor and support. Partners tend to put their effort where profit is highest.
A discount on a price list does not show the full picture. A product with a small margin can still pay well if it leads to steady services work. A product with a large margin can lose money if it needs heavy support.
Vendors who understand partner gross profit can design pricing, incentives and services opportunities that make their product worth a partner's time. Asking partners about their real costs is a good place to start.
In practice
A reseller finds that a product with a lower discount earns more profit overall because it leads to recurring managed services, so it trains more staff on that product.