What is Gross Margin?
Gross margin is a key profitability metric that shows how much profit a company makes from selling its products, after subtracting the direct costs of producing them (known as the Cost of Goods Sold, or COGS). It's usually expressed as a percentage. For example, if a product sells for $100 and costs $60 to make, the gross profit is $40, and the gross margin is 40%. A high gross margin means a company is very efficient at producing its goods. In a reseller partnership, the partner's gross margin is the difference between what they buy the product for and what they sell it for.