Glossary
Profit margin
Profit margin is gross profit divided by the selling price. It says how much of every 100 you sell is left after the cost of the goods.
What it means for a shop owner
It is the quickest check on whether your pricing is healthy. A thin margin means any discount or any rise in your supplier cost can turn a sale into a loss. Compare it across items to see which ones carry the shop and which ones drag it.
A worked example
You sell an item for 50 and it costs 40. Gross profit is 10 and the margin = 10 ÷ 50 = 20%. Ten of every 50 stays with you.
Related
Try it in your shop, free, no card.
The free plan: the whole shop for one branch, an offline cashier with stock, debts and accounting, with a daily limit on invoices, expenses and purchase orders. What it includes