Question 1

What is profit margin?

Accepted Answer

Profit margin is the percentage of your selling price that represents profit. It's calculated by dividing your profit by the selling price. For example, if you sell a product for $100 and your profit is $40, your margin is 40%.

Question 2

What is a good profit margin for e-commerce?

Accepted Answer

A healthy profit margin for e-commerce businesses is typically 40% or higher. However, this can vary by industry. Margins between 20-40% are moderate, while margins below 20% may indicate pricing issues or high costs that need addressing.

Question 3

What's the difference between margin and markup?

Accepted Answer

Margin is profit divided by selling price (profit as a percentage of revenue). Markup is profit divided by cost (how much you added on top of cost). A 50% margin equals a 100% markup. Same profit, different perspective.

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