The margin of a treatment is the difference between its price and certain costs, expressed in euros or as a percentage of the price. The word "margin" is not enough: it must be said what costs have been subtracted.
Difference between margin, contribution and profit
| Indicator | What remains | What answers |
|---|---|---|
| Gross margin | Product and direct consumables | How much is left after physically executing the session? |
| Contribution margin | All variable costs | How much does the session contribute to fixed expenses and profit? |
| Service result | Variables, structure and assigned work | What does it leave economically after remunerating resources? |
Use consistent names in your reports. If a tool calls price minus product “profit,” the figure is too optimistic to decide.
##Percentage margin formula
Margin (%) = (net price − considered cost) ÷ net price × 100
The amount must be net of VAT where applicable and costs and income must use the same tax criteria.
##Margin is not the same as markup
Complete treatment example
Suppose a one-hour service with a net price of €65, performed by an employee whose hourly cost is estimated at €12 for this simulation:
- product and consumables: €9;
- commissions and variables: €4;
- assigned structure: €10;
- cost of work: €12.
The contribution margin is €52 –65 minus 13–, but it must still cover structure and work. After both there are €30 left. That last figure is equal to 46.2% of the net price in this example. It is a mathematical scenario, not a recommended range for all treatments.
How to analyze the margin without losing context
Review four dimensions together:
- euros per session: amount available after costs;
- percentage: efficiency with respect to price;
- euros per hour: use of agenda and equipment;
- volume: total monthly contribution.
A treatment with a moderate margin and high recurrence can contribute more to the center than one with a high margin with two monthly appointments. The opposite can also happen if the former blocks critical hours.
When to recalculate
Updates the calculation when a purchase price, dosage, duration, commission, rental or discount policy changes. Do a regular check-up even if nothing seems to have changed – small cumulative increases are easy to ignore.
If you sell treatment packages, first calculate the margin on one service and then apply the package discount. The packages calculator helps you identify the floor price.
Continue with profitability per hour to compare treatments and with prices of aesthetic services to reconstruct a rate that does not depend on arbitrary percentages.
FAQ
What is the margin of a treatment?
It is the part of the price that remains after subtracting the costs defined in the calculation. To interpret the figure you must indicate whether it is gross margin, contribution margin or profit.
Are margin and markup the same thing?
No. The margin is divided by the sales price; the surcharge is divided by the cost. A 100% markup on a cost of €25 produces a price of €50, but the margin is 50%.
Do I calculate the margin with VAT?
When VAT is applicable, normally analyze the margin on amounts without VAT. Mixing the tax collected with the business income overestimates the available result.
Does the cost of my time reduce the margin?
It depends on the indicator. It may be outside the contribution margin, but it must enter before calling the final result a profit. LashPro recommends showing it separately so as not to make the work invisible.
Does a high margin guarantee profitability?
No. A service can have a high percentage and contribute few euros, take up too much time or sell very little. Evaluate margin in euros, percentage, time and volume.