In principle, it is possible to make a lot of profit with low margins, but it depends on various factors.
A low margin means that the price of the product or service is only slightly higher than the variable costs.
However, if the company is able to sell a sufficiently large number of units, it can still make a high profit.
Discount retailers form a typical example of how a high profit can possibly be achieved with low margins.
However, there are also limits to the profitability of low-margin businesses. When the margin is too low, it can be
difficult to cover fixed costs and make a profit. In addition, it may be more difficult to differentiate from competitors
if the company only focuses on low prices.
Overall, it depends on how well the company controls its costs and how effectively it markets its products or services to generate enough revenue to cover its fixed costs and still make a profit.