Industries with the Highest Profit Margin in the US in 2024
Each business follows a unique way of carrying out its operations. Investors can gain a better understanding of a company’s efficiency by analyzing its gross and net profit margins. These margins assess how much profit a company is generating from its revenue. Identifying industries with high profit margins businesses can be a strategic first step in running a business and generating substantial profits. Aspiring entrepreneurs and business planners can find valuable insights from sectors that have historically shown exceptional profitability.
Content
– Top 2024 Statistics of Highest Profit Margin US Industries
– The Best 10 US Industries with the Highest Profit Margin
– Industries with the Highest Gross Profit Margin
– Highest Profit Margin Intangible Asset Industry
– E-commerce – The Most Profitable Industry in 2024
Top 2024 Statistics of Highest Profit Margin US Industries
– Trusts & Estates industry tops the rank with the highest profit margins, at 60.9%, in 2024.
– Banks – Regional stands out with a 99.8% gross profit margin.
– The 32% high-profit margin of the finance industry is driven by the ability to leverage capital and manage risk.
– Market Reports World predicts the dropshipping market will grow 20% annually by 2028.
– The online course industry is expected to reach a market size of $375B by 2026.
The Best 10 US Industries with the Highest Profit Margin
Starting a business is challenging and requires flexibility due to economic uncertainties. Turning a business into a profit is much easier when starting with a profitable business model. IBIS World proposed a list of the industries with the highest profit margins based on expert analysis and their database of 1,300+ US industries in 2024.
| Industry | Profit Margin | |
|---|---|---|
| 1 | Trust & Estates | 60.9% |
| 2 | Maids, Nannies, and Gardeners | 51.9% |
| 3 | Stock and Commodity Exchanges | 51.5% |
| 4 | Commercial Leasing | 51.1% |
| 5 | Refined Petroleum Pipeline Transportation | 50.4% |
| 6 | Private Equity, Hedge Funds, and Investment | 48.9% |
| 7 | Cigarette and Tobacco Manufacturing | 47.8% |
| 8 | Land Leasing | 47.4% |
| 9 | Shopping Mall Management | 43.1% |
| 10 | Residential RV and Trailer Park Operators | 43.0% |
Source: IBIS World
The revenue of the trusts and estates industry is composed primarily of capital gains on trusted assets and ordinary dividends, demonstrating a rise over the past 5 years. This industry benefits from ample earnings in equity markets and a rise in house prices, with a profit margin of 60.9% in 2024.
Industries earning the highest profit margins provide specialized services and cater to high-net-worth clientele. For example, trusts and estate lawyers manage the wealth of well-off individuals. Additionally, nannies and gardeners are often hired by prosperous families. Stock and commodity exchanges facilitate the trading of financial instruments, which are considered highly profitable.
Source: IBIS World
Industries With The Highest Gross Profit Margin
Usually, even financially stable companies may have lower gross profit margins because they prioritize sales volume or operate in competitive markets. Creating industry-specific benchmarks is important for gaining valuable insights from gross profit margins.
| Industry | Avg. Gross Profit Margin | Avg. Net Profit Margin | Number of Companies |
|---|---|---|---|
| Banks - Regional | 99.8% | 24.1% | 274 |
| REIT - Mortgage | 90.8% | 22.6% | 65 |
| Insurance Brokers | 89.8% | 6.8% | 12 |
| Banks - Diversified | 88.6% | 24.7% | 6 |
| Mortgage Finance | 88.1% | 12.5% | 17 |
| Biotechnology | 86.6% | -249.2% | 489 |
| Credit Services | 83.9% | 20.8% | 44 |
| Capital Markets | 82.8% | 13.3% | 33 |
| Asset Management | 82.1% | 24% | 72 |
| Insurance - Specialty | 78.4% | 13.5% | 16 |
Source: Full Ratio
As per the data on fullratio.com, Banks – Regional stands out among high gross profit margin industries with a 99.8% gross profit margin. This indicates that a very high percentage of income remains after accounting for COGS. This list is followed by REIT – Mortgage 90.8% and Insurance Brokers 89.8%. To effectively join these high-profit margin industries, consider connecting with a business plan writer.
While gross profit margin reveals the percentage of income left after deducting COGS, the net profit margin is calculated after subtracting all expenses. Banks – Regional again tops the list. Biotechnology, however, has a negative net profit of -249.2%, indicating the industry spends more than it earns on average. This could be due to high research and development costs in this sector.
Source: Full Ratio
Highest Profit Margin Intangible Asset Industry
In industries where there is no physical product being sold (e.g., SaaS), the COGS will be much lower, and profit margins will be higher. A careful follow-up of a business plan can increase your chances of entrepreneurial success in every discipline. While the value of a business plan is undeniable, the cost can vary. Numerous factors influence the business plan cost, including the required research and the intricacy of the business.
The industries that have the highest profit margins are:
– Finance: 32%
– Software (entertainment): 29.04%
– Transportation: 28.90%
– Software (System and Application): 19.66%
– Information Services: 16.92%
The 32% high-profit margin of the finance industry is driven by the ability to leverage capital and manage risk. It generates income through interest, fees, and investment returns.
The scalability of entertainment software products with low marginal costs reaches a global audience through digital distribution and generates a 29.04% high-profit margin.
Companies in the transportation sector benefit from economies of scale and dispersed logistics networks to secure a 28.90% profit margin.
The 19.66% profit margin of the System and Application industry is supported by revenue from relatively low production costs along with licenses, subscriptions, and updates.
Information Services’ 16.92% high-profit margin is driven by the increasing demand for information management services, data analytics, and cloud computing.
Source: Polymer Search
E-commerce – The Most Profitable Industry in 2024
Every business sustains or fails due to its ability to generate a profit. A strategic business plan is indispensable for charting your business goals, target market, operational strategies, and financial projections. Creating a customer base, marketing, and developing a firm business plan lead you toward the most successful business avenue.
– Dropshipping Business: Dropshipping involves handling a broad range of products like bookstores. This business model reduces your inventory costs, which might be cost-prohibitive for a small business to keep on hand. As a result, it increases net income. According to Market Reports World, the global dropshipping market is forecasted to grow 20% annually by 2028.
– Online Courses: Creating online courses is a great way for specialists to not only sharpen their skills but also advance their careers by educating others. It is a profitable business opportunity for professionals to turn their expertise into passive income. There is a huge demand for courses that cover business strategy, finances and accounting, sales/marketing, and public speaking. An Online Learning Market Size report proposed that the course industry is expected to grow to $375B by 2026.
– Accounting Services: With an 18.4% net profit margin, accounting and bookkeeping services are becoming some of the most profitable service providers you can count on in 2024.
Source: Foundr, Think Impact, Market Reports World, Accounting Today
Final Inference
We can analyze the gross and net profit margins of various US-based industries to identify sectors with the highest profitability in 2024. The key findings of this report show that banks, REITs, and insurance brokers exhibit exceptional gross profit margins. This data also indicates a strong correlation between specialized services and high-profit margins. Overall, this report offers valuable insights into the industries with the highest potential profit margins.
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