Level 3 - Commercial terms you need to know - Profit Margin-L3B2 - CTYNTK

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Profit margin shows how much of a company’s sales revenue remains after expenses, expressed as a percentage. It is calculated by subtracting costs from revenue, dividing the profit by revenue, and multiplying by 100. For example, if sales are £100 and costs are £75, profit is £25 and the profit margin is 25%. A higher margin gives more flexibility to offer discounts or absorb costs, while a lower margin requires tighter control. Understanding profit margins helps salespeople make sensible pricing, discount, and wholesale decisions, and makes them seem more credible and trustworthy.

Keywords

profit margin

sales revenue

pricing strategy

discount decisions

wholesale decisions