Gross Margin

What The Hell is Gross Margin?

Gross Margin is the chunk of money you keep from a sale after paying only for the direct materials used to make the product.

It tells you if your core product is actually making money, long before you start paying for other running costs Overhead expenses = Ongoing business costs like rent, salaries, or wifi that aren't tied to making the product.

Real World Example & Calculation :
-> Imagine you run a direct-to-consumer premium coffee brand.
-> Selling price per coffee bag: ₹1,000
-> Direct costs (beans, packaging, shipping): ₹400
-> Gross Profit = ₹1,000 - ₹400 = ₹600
-> Gross Margin = (₹600 / ₹1,000) × 100 = 60%

✍🏻 Mantra Joshi

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