Glossary / Profit Margin
Profit Margin
Net profit as a percentage of your sale price.
Profit margin expresses how much of each dollar of revenue you actually keep. Formula: (net profit ÷ sale price) × 100. Unlike ROI (which compares profit to your investment), margin compares profit to revenue. Margin is most useful for understanding whether your pricing is sustainable across a high volume of sales.
Example
You sell an item for $50 and net $15 after all costs. Profit margin = ($15 ÷ $50) × 100 = 30%.
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