How to Define Retail Margins

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The definition of retail margins is the difference between the selling price and the cost of the individual item or service. Determine retail margin for a business or store with information from a certified public accountant in this free video on business and accounting terms.

Part of the Video Series: Business & Accounting Terms
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Video Transcript

What's a retail margin? In a retail store that sells pencils or socks, or cameras, they purchase the goods that they're going to sell, from their vendors, put them on display, sell them for a profit. The difference between the selling price, and the cost of the individual item, is the retail margin. Let's say a pair of socks that costs five dollars to buy wholesale, is sold retail for ten dollars. The margin is five dollars or fifty percent.


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