What is Gross Profit Margin?
Gross margin is the difference between revenue and cost of goods sold, divided by revenue. Gross margin is expressed as a percentage. Generally, it is calculated as the selling price of an item, less the cost of goods sold, then divided by the same selling price.
What is the average profit margin by industry?
Industry Averages for Gross Profit Margins
| INDUSTRY | GROSS PROFIT MARGIN | NET PROFIT MARGIN |
|---|---|---|
| Retail (Online) | 42.53% | 4.95% |
| Software (Internet) | 58.58% | -5.60% |
| Transportation | 19.91% | 3.88% |
| Total Market* | 36.22% | 5.05% |
What is a good gross profit margin by industry?
An NYU report on U.S. margins revealed the average net profit margin is 7.71% across different industries. But that doesn’t mean your ideal profit margin will align with this number.
As a rule of thumb, 5% is a low margin, 10% is a healthy margin, and 20% is a high margin.
What is the average gross profit margin for a manufacturer?
The average manufacturer’s gross profit percentage varies between 25 percent and 35 percent.
However, items with more expensive price tags, such as motor homes, automobiles, and even houses, have markup prices of only 10 to 15 percent.
What industry has the lowest profit margin?
10 Businesses With The Lowest Profit Margins
- Furniture Stores
- Assisted Living and Retirement Homes
- Travel and Accommodations
- Recreation Services
- Home Healthcare Services
- Real Estate Services
- Medical Supply and Equipment Manufacturing
- Gas and Oil Extraction Services
Is 30 percent a good profit margin?
What is a Good Profit Margin? You may be asking yourself, “what is a good profit margin?” A good margin will vary considerably by industry, but as a general rule of thumb, a 10% net profit margin is considered average, a 20% margin is considered high (or “good”), and a 5% margin is low.