I suspect that Hill's margin would have been pretty hefty, at least 25%. A good salesman sells himself, not necessarily his merchandise alone. The scam is that he's a total fraud. He doesn't know one note from another. He claims to be an experienced musician and promises the kids and parents that he is going to organize a boys' band and obviously give them lessons so that they can become a band. Of course, he plans on skipping town (with his profit, which is probably considerable) without giving any lessons and without organizing the band. That's the scam.
If I am remembering correctly, he says to Marcellus that he is going to deliver the instruments so that the townspeople will get excited and cough up the money for the uniforms. As I said below, I don't know why he buys the uniforms, though. By delivering them, he makes it harder to press charges against him, so maybe that's why.
