What is retail margin?

Retail margin refers specifically to the difference between the cost of goods sold (COGS) and the retail selling price. This metric is crucial for retailers as it indicates the profitability of each product sold. By calculating the retail margin, businesses can determine how much they earn from sales after covering the cost of the merchandise. A higher retail margin suggests a more profitable sale, which is essential for businesses aiming to optimize their overall financial performance.

The other options point to different concepts in retail finance. The total profit from sales over a period encompasses various factors, including operating expenses and not just the retail margin. Costs associated with merchandise storage relate to inventory management and do not directly represent the profitability of individual items sold. Lastly, total revenue from promotions focuses on income generated through marketing initiatives rather than the specific profitability of goods sold, which the retail margin effectively captures.