Working out the average margin for a period by adding up each job's percentage and dividing by the number of jobs looks reasonable, but it hides a distortion: it treats a small €500 job and a large €50,000 one identically, when their real weight on overall profitability is entirely different.
The problem with a simple average
If ten small jobs carry an excellent margin while one large job, worth as much as all the others together, carries a poor one, the simple average returns a reassuring number that hides the real problem: most of your actual revenue is returning very little.
How weighting works
A weighted average margin weights each job by its value rather than counting it simply as one more job. That way the final number reflects what the firm's overall revenue is genuinely returning, not what the average job returns in the abstract.
Why it is the figure to watch when deciding
When deciding where to put commercial effort — which product categories, which kinds of customer — the weighted margin gives a more reliable indication of where profit actually comes from, and stops you being misled by an arithmetic average that treats every job as equivalent regardless of its size.