← Glossary Business glossary Calculate your margin
What is Gross margin?
The percentage of revenue left after the direct cost of what you sold.
Gross margin is revenue minus the cost of goods sold, divided by revenue. It tells you how much of each sale is left after paying for the product itself, before overheads.
Example: you sell something for £40 that cost you £16 to make. Your gross profit is £24, and your gross margin is 24 ÷ 40 = 60%. A healthy gross margin gives you room to cover overheads and still profit.
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