Invoicing

    Gross margin

    Profit as a percentage of the sell price (price − cost) ÷ price.

    Definition

    Used to compare profitability across jobs and trades. A 50% gross margin means half of every dollar collected is profit before overhead. Service-heavy trades aim for 50–70% gross margin on labor.

    Related terms

    Markup

    The percentage added to your cost to determine the customer-facing sell price.

    Net profit margin

    Net profit as a percentage of revenue.

    Pricing strategy

    How a business sets the prices it charges for goods and services.