Gross Profit Margin
Gross profit margin shows what percentage of revenue remains after subtracting the cost of goods sold (COGS). It tells you if your pricing covers direct costs and leaves room for operating expenses and profit. This is the first line of defense in understanding your business profitability.
Formula
((Revenue - Cost of Goods Sold) / Revenue) × 100
In plain English
What you keep from each dollar of sales after paying direct costs
Why Gross Profit Margin Matters
This metric tells you if your pricing covers direct costs like labor, materials, and supplies. A healthy gross margin gives you breathing room to pay for overhead (rent, insurance, marketing) and still make a profit.
Gross Profit Margin by Industry
Choose your industry to see specific benchmarks, examples, and improvement strategies
Gross Profit Margin for Cleaning Companies
How much money you keep from each sale after paying direct costs
Gross Profit Margin for Salons & Spas
How much money you keep from each sale after paying direct costs
Gross Profit Margin for Restaurants
How much money you keep from each sale after paying direct costs
Gross Profit Margin for HVAC Contractors
How much money you keep from each sale after paying direct costs
Gross Profit Margin for Marketing Agencies
How much money you keep from each sale after paying direct costs
Gross Profit Margin for Consulting Firms
How much money you keep from each sale after paying direct costs
Gross Profit Margin for Freelancers
How much money you keep from each sale after paying direct costs
Gross Profit Margin for Creative Agencies
How much money you keep from each sale after paying direct costs
Gross Profit Margin for IT Services
How much money you keep from each sale after paying direct costs
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