Margin

Margin refers to the difference between the cost of producing a product and the price it’s sold for. It’s a key figure that shows how much profit a business makes on each sale.

For example, if it costs $10 to make a product and you sell it for $25, your margin is $15.

What do you mean by margin?

When someone talks about “margin,” they usually mean profit margin-the amount of money a business keeps after covering costs. Margin can be shown as a dollar amount or as a percentage of the selling price.

Higher margins mean more room for profit, even after covering other expenses like marketing or shipping. If you're in ecommerce, keeping a strong margin is critical-especially with products made through print-on-demand services.

What is a margin in business?

In business, margin is used to measure profitability. There are different types:

• Gross margin – Revenue minus the cost of goods sold
  
  
• Net margin – Final profit after all expenses
  
  
• Operating margin – Profit after operating costs, but before taxes
  
  

For online sellers and POD entrepreneurs, understanding margin helps you price products correctly and make sure your store remains profitable. Learn more in our guide on how to start a print-on-demand business.