GM income is another name for gross profit: revenue minus the direct costs required to deliver that revenue.

What costs belong in COGS?

COGS includes direct production or purchase costs, plus inbound freight and packaging. It excludes marketing, rent, and admin costs.

What is the difference between gross margin and net profit?

Gross margin focuses on profit after direct costs. Net profit subtracts operating expenses, taxes, and interest, so it is usually lower.

How can I improve margin?

Improve margin by raising price, lowering unit cost, cutting fees, or reducing discounts and returns.

Finance Tool

GM Income Calculator

Free gross margin (GM) calculator to analyze income, profit margins, and break-even point in real-time.

Sales Information

Units Sold

Number of units in period

Selling Price

Price per unit

Cost per Unit

Direct cost (COGS)

Gross Profit$3,000.0060.0% margin

Net Revenue$5,000.00

Margin Health

20%40%60%

Healthy60.0%

Breakdown

Gross Revenue$5,000.00

Net Revenue$5,000.00

− Cost of Goods Sold$2,000.00

Gross Profit$3,000.00

Profit per Unit$30.00

What is Gross Margin?

Gross margin is the percentage of revenue remaining after deducting the cost of goods sold (COGS). It shows how efficiently a company uses labor and materials to produce goods.

Gross Margin % = ((Revenue − COGS) ÷ Revenue) × 100

Industry Benchmarks

Retail: 20-50%
Manufacturing: 25-35%
Software/SaaS: 70-90%
Services: 50-70%

Tips to Improve Margin

Negotiate better supplier prices
Reduce production waste
Optimize pricing strategy
Improve operational efficiency

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