Margin % is the percentage of selling price that is profit, and profit is price minus cost.
Big Business gives you several ways to determine Cost to give you a useful Margin %. These include Vendor Cost, Average Cost, and Landed Cost that you can pick in Prefs.
Margin % can then be used two ways to help with pricing. You can assign a Margin % using Update or Auto-Apply. In turn, Price changes update the Margin % for review.