Monitoring and Improving Product Margins
How to use AskBiz POS to track gross margin per product, identify underperforming items, and make data-driven pricing decisions to improve profitability.
Key Takeaways
- Gross margin = (Selling Price − Cost Price) ÷ Selling Price × 100. Every product should have a cost price set to enable this calculation.
- The Products report in AskBiz shows margin per product — sort by margin % to find your most and least profitable items.
- Increasing price is not the only way to improve margin — reducing cost through supplier negotiation or removing low-margin products achieves the same result.
Why margin matters more than revenue
A product that generates £10,000 in revenue but costs £9,500 to produce is almost worthless — you've tied up cash and effort for a 5% margin. A product that generates £2,000 in revenue but only costs £400 to produce gives you a 80% margin and £1,600 of gross profit. Revenue is vanity; margin is the real measure of a product's contribution to your business. AskBiz's product margin tracking makes these calculations automatic — but only if every product has a cost price set.
Setting and maintaining cost prices
The cost price is what you paid your supplier for one unit (excluding any costs you can't attribute per unit, like rent). Go to Operations > Retail > Products and open any product. Enter the Cost Price. If your supplier raises prices, update the cost price immediately — leaving an outdated cost price in the system means your margin data is wrong. For products with variable costs (e.g. produce priced by market rate), review monthly. You can update cost prices in bulk via CSV export/import.
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See this in action for your business
AskBiz tracks these metrics automatically — just connect your data and start asking questions.
Start for free →Viewing margin per product
Go to POS Reports > Products. Select a date range. The table shows each product with: Units Sold, Revenue, Cost of Goods Sold (COGS), Gross Profit, and Margin %. Click the Margin % column header to sort. Your highest-margin products appear at the top; lowest at the bottom. Products with a 0% or blank margin have no cost price set — add it. Products with negative margin are being sold below cost — investigate immediately and either raise the price or stop selling at that rate.
Identifying margin problems
Three patterns to watch for in the margin report: 1) Products with high revenue but low margin — these seem important but aren't contributing much profit; consider raising prices or renegotiating with the supplier. 2) Products with high margin but low revenue — these are underappreciated; consider giving them more prominence or better placement. 3) Products where margin has declined compared to last period — this usually means your cost increased (supplier price rise) but your selling price didn't adjust to compensate.
Taking action on margin data
When you identify a product with unacceptable margin, you have three options: raise the selling price, reduce the cost price (negotiate with your supplier or find a cheaper alternative), or discontinue the product. Raising price is the fastest option but risks losing customers. For commodity products where price sensitivity is high, supplier negotiation is better. For products that are genuinely unprofitable and not driving footfall, discontinuation frees up shelf space and cash for better-performing lines. Set a target minimum margin for your business — say 30% — and flag any product that falls below it for review.