Margin describes the relationship between selling revenue and the costs included in a defined calculation. A reseller needs to state which costs and denominator are being used, because margin and markup are different measures. Credit cost, payment fees, refunds and support work can affect the result, so a headline retail price is not the same as profit.
A practical example
A reseller subtracts the relevant cost of serving a customer from the sale value, then divides the remainder by revenue to calculate a defined margin. Dividing by cost instead produces a markup figure, which answers a different question for the business.
A common misunderstanding
Do not advertise a guaranteed percentage without a clear calculation and actual costs. A credit pack's price alone cannot establish earnings, and gross margin excludes costs not included in its definition.
Related terms
General operational definition; actual service terms remain separate. Editorial approach