Margin

Definition - What does Margin mean?

Margin refers to the profit a company makes according to their mark-up on the products they make. For example, if the cost of a winery making a bottle of wine is $7 and the sale price of the wine is $20, the margin is $13 and thus the profit of the winery.

WineFrog explains Margin

In the wine industry (and any business in general), the margin refers to the profit winemakers make. In winemaking, many facets must be considered and understood for a producer to craft a wine and sell it for a profit that is beneficial to the business. A winery makes the highest margin when they sell directly to the customer. If a winery sells their wine to a restaurant, their margin is much lower as they are selling in bulk. The price of their wine, which they are selling to the restaurant, must also be interesting for the restaurant to purchase so they can make a profit.

In accounting this margin is also called "gross margin," or the overall profit a business makes from a product sold.

Share this:

Connect with us

Never Miss an Article!

Subscribe to our free newsletter now - The Best of WineFrog.