Gross margin
What is left from revenue after the direct cost of delivering it.
Last reviewed 12 September 2026
Gross margin shows whether the thing you sell makes money before overhead. A business with thin gross margin cannot fix profitability by cutting office costs — the unit itself is the problem.
Track it per product or per client, not only company-wide. Blended margin hides the client that quietly loses you money.
Formula
Gross margin % = (Revenue − COGS) ÷ Revenue × 100
Example
€100,000 revenue, €62,000 direct costs → 38% gross margin.
Frequently asked
What is gross margin?+
What is left from revenue after the direct cost of delivering it. Gross margin shows whether the thing you sell makes money before overhead. A business with thin gross margin cannot fix profitability by cutting office costs — the unit itself is the problem. Track it per product or per client, not only company-wide. Blended margin hides the client that quietly loses you money.
How do you calculate gross margin?+
Gross margin % = (Revenue − COGS) ÷ Revenue × 100 For example: €100,000 revenue, €62,000 direct costs → 38% gross margin.
Why does gross margin matter for founders?+
Track it per product or per client, not only company-wide. Blended margin hides the client that quietly loses you money.
Related terms
COGS (cost of goods sold)
Costs that exist only because you delivered the sale.
Contribution margin
Revenue minus all variable costs — what each sale contributes to fixed costs.
Net profit
What remains after every cost, including tax and interest.
Unit economics
Revenue and cost measured per single unit — one customer, one order, one project.
See this number in your own business
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