Finance

Gross Margin

Quick answer

The difference between revenue and cost of goods sold, usually expressed as a percentage of revenue.

Key takeaways

Purchase cost and landed cost
Discounts and promotions
Product mix (SKUs with different margins)

What gross margin is

Gross margin = (revenue - cost of goods sold) / revenue. It shows how much remains of each euro of sales after covering the direct product cost, before operating expenses.

Why it matters to the board

Gross margin is the first layer of profitability and the basis for all pricing, mix and sourcing decisions. Its silent erosion (through landed cost or uncontrolled discounts) hits the bottom line directly.

What influences it

Purchase cost and landed cost

Discounts and promotions

Product mix (SKUs with different margins)

How CRMconnect helps

CRMconnect provides visibility over real sourcing cost (including landed cost) and the mix sold per channel, so gross margin is managed on real data, not estimates.

Real-world example

An importer thought a product had good margin, but the real landed cost (duties, freight) cut it by 6 points. Visibility in CRMconnect enabled correct repricing.

Last updated: 2026-07-17

Frequently asked

Gross margin vs markup?+

Markup is calculated on cost (profit/cost), gross margin on revenue (profit/revenue). Same figures, different bases - don't confuse them when pricing.

How do I protect gross margin?+

By knowing the real cost (landed cost), controlling discounts and managing product mix. Visibility on real data is key.

Where CRMconnect fits

Software OMS Conectori ERP Software WMS

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