Finance & Moneyintermediate
Gross Margin
Definition
The percentage of revenue left after subtracting the direct cost of making or buying what you sold. Gross Margin = (Revenue − COGS) ÷ Revenue × 100.
Why it matters
Gross margin tells you how profitable your product is before accounting for other costs. A 70%+ gross margin is considered strong for digital products; physical products typically run 30-60%.
Example
You sell a digital template for £30. It cost you £9 in fees and software to make. Gross margin = (£30 − £9) ÷ £30 × 100 = 70%.
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