The term “margin” refers to the difference between the cost and the selling price of a product or service. It is essentially the profit a company makes per unit of sales.
“Margin” refers to the room for maneuver or flexibility that a company has in setting its prices. It is the difference between the cost of a product and the lowest price at which the company would sell it to still make a profit.
Margin margin is therefore the difference between the cost of a product and the selling price set by the company. It enables the company to maximize its profit while remaining competitive.
Greater margin headroom can be advantageous to a company because it has more flexibility in pricing and thus may be able to generate higher profits. However, a smaller margin headroom may mean that the company may have less room to cut prices or deal with competitive pressures.
It is important to note that margin headroom is affected by several factors, including the cost of production, raw materials, labor, marketing and distribution, as well as competitor prices and demand for the product. Companies must strike an appropriate balance to ensure optimal margin headroom that is both profitable and competitive.