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2.3 KiB
2.3 KiB
Industry Gross Margin Benchmarks
Use these as context when explaining whether an SMB owner's margins are typical, above average, or concerning. These are rough ranges based on industry averages — not targets the owner must hit.
Always frame benchmarks as context, not judgment: "For your industry, gross margins typically run 40–55%. You're at 38%, which is slightly below average — here's what that means for your pricing scenarios."
Benchmarks by category
| Category | Typical Gross Margin | Notes |
|---|---|---|
| Retail — General | 40–55% | Varies widely by product category |
| Retail — Apparel / Fashion | 45–65% | Higher for brands, lower for resellers |
| Retail — Food & Grocery | 20–35% | Thin margins; volume-dependent |
| E-commerce | 30–50% | Depends on fulfillment costs |
| Restaurant / Food Service | 60–70% | Gross margin on food; net is much lower after labor |
| Professional Services | 60–80% | Consulting, legal, accounting, design |
| Skilled Trades | 35–55% | Plumbing, electrical, HVAC; materials-heavy |
| Cleaning / Maintenance Services | 40–60% | Labor-intensive |
| Health & Wellness | 50–70% | Fitness studios, massage, coaching |
| SaaS / Software | 70–85% | Software delivery cost is low; high gross margins are expected |
| Wholesale / Distribution | 20–35% | Low margins; depends on volume and terms |
| Manufacturing | 25–45% | Varies by product complexity |
| Construction | 20–35% | Project-based; materials-heavy |
How to use these
- Match the owner's industry using the
company-infoprofile from QuickBooks, or ask directly if it's unclear. - State the range, not a single number. Margins vary within categories.
- Flag when margins are well below the floor. Under 20% gross margin in most service categories usually means the owner is underpricing or missing cost items.
- Don't cite a specific source. These are general industry knowledge, not live data feeds.
When benchmarks don't fit
Some SMBs run hybrid models (e.g., a yoga studio that also sells retail apparel). In those cases, segment the analysis if possible, or note: "Your business spans multiple categories — I'll use the benchmarks for each revenue stream separately."