Delivery Margin
The percentage of revenue remaining after subtracting direct delivery costs (labor) from agency gross income. A healthy delivery margin is typically 70% or higher to cover overhead and generate profit.
Analyze the profitability of your productized services and identify opportunities to increase margins.
Example
An agency charges $10,000/month for a content retainer. After subtracting $3,000 in writer and strategist time, they have a 70% delivery margin ($7,000). This covers their $2,500 overhead allocation and leaves $4,500 in profit. When a similar project delivers only 50% margin, they investigate and find scope creep eating into hours.
Related terms
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