WTF? / Part 3 / 3.5
What is gross margin?

Gross margin

THE 30-SECOND ANSWER

Gross margin is revenue minus COGS, usually shown as a percentage of revenue. It is what is left to cover everything else.

In plain English

Gross margin pays rent, fuel, wages, insurance, interest and you. What remains after that is net profit.

In resale, gross margin swings by channel and by grade. Track it per load and per channel, not just as one company-wide number.

Example

Revenue $18,000, COGS $10,800 → gross profit $7,200 → gross margin 40%.

Why it matters

It is the fastest test of whether your buying and pricing actually work.

COMMON MISTAKEComparing gross margin across months without noticing the mix changed.
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