Gross margin is 38%. A fifth of the jobs lose money.

A blended margin is an average of two different businesses. Most firms only ever see the average, and act on it as though the tails were not there.

By Steve 5 min read
Abstract bridge artwork for Gross margin is 38%. A fifth of the jobs lose money.

A blended gross margin is one of the few numbers almost every business can produce on demand. It is also one of the few that describes something nobody actually sells. No customer buys at 38%. Some buy at 60% and some buy at minus 4%, and the reported figure is simply where those two populations happen to land this quarter given the mix. That would be a harmless abstraction if the distribution were tight. It rarely is. In most service and distribution businesses, the spread of margin across jobs, customers…

Keep reading for free

Create an account to read the rest.

The whole library is free. No card, no subscription, no trial that quietly ends. An account simply lets us know who we are writing for, and opens every article from here on.

  • Every article, in full, at no cost
  • New articles published every weekday
  • Takes about twenty seconds
Create a free account I already have one

Free means free. We will not charge you for the library, and you can read as much of it as you like.

Important: General information only. Rialto Bridge articles describe patterns and considerations that may apply to a business; they are not financial, legal, tax or accounting advice, and they take no account of your particular circumstances. Consider your own situation and seek advice from a qualified professional before acting.

More on Pricing

Scroll to Top