Profit margin is the percentage of revenue that remains as profit after deducting costs. Formula: Profit Margin = (Revenue - Cost) / Revenue × 100. A 30% margin means you keep ₹30 of every ₹100 in sales.
What is the difference between margin and markup?+
Margin is profit as a percentage of selling price: (Price - Cost) / Price × 100. Markup is profit as a percentage of cost: (Price - Cost) / Cost × 100. A 50% markup = 33.3% margin.
What is a good profit margin?+
It varies by industry. Retail: 2-5%, Software/SaaS: 70-90%, Manufacturing: 5-10%, Professional services: 15-30%. Generally, above 20% net margin is considered healthy.
How do I improve my profit margin?+
Increase prices, reduce cost of goods, negotiate better supplier terms, reduce overhead expenses, improve operational efficiency, or shift to higher-margin products/services.