Profit margin is the share of a product’s selling price that the business keeps after all costs for that product are deducted. It shows how much each sale earns, not just how much it sells.
On food delivery platforms, margin must account for platform commission, packaging, delivery and any campaign discount as well as product cost. The same product can have a healthy margin in store and a much thinner one on a platform.
Profit margin is not the same as markup. Pricing 30% above cost does not give a 30% margin; margin is always calculated on the selling price.
Profit margin = (Selling price − Total costs) ÷ Selling price × 100
If a product sells for 245 TRY and commission, product and packaging costs total 170 TRY, profit is 75 TRY and the margin is about 30%.
PRACTICAL TIPS
- 01Calculate margin separately for each sales channel.
- 02Set prices backwards from your target margin.
- 03Recheck margins as costs change.