The commercial margin concept refers to the difference between the cost of production and the selling price, in short, it is the profit or margin on sales. The following formula is used to calculate the Commercial Margin.
MC: Commercial Margin
PV: Sales price
CP: Product cost
MC = PV - CP
Example:
Suppose you charge $100 for offering a service and let's say that the operation of that service costs you $20; this is the expense directly linked to the execution of the order.
The Sales Glossary is a compendium of all the most commonly used terminology in sales strategy. Many of the concepts listed here are used when implementing a CRM system or a digital sales funnel, no matter if they are legacy systems or an online CRM. See also our blog that deals with sales techniques, marketing and sales culture.