Okuzeka
Entrepreneurship & Startups vocabulary · Unit Economics & Metrics

Gross margin

Meaning in entrepreneurship & startups, with examples

/ˌɡroʊs ˈmɑːrdʒɪn/nounCommon term

In entrepreneurship & startups, gross margin means: The share of revenue left after paying the direct costs of making or delivering a product, before other costs such as marketing, rent and office expenses.

In Turkish: brüt kar marjı, brüt marj

How it is used

Usually given as a percentage. Software companies often have high gross margins, while hardware, delivery and retail businesses usually have lower ones. Investors compare gross margin across similar companies and watch whether it improves as you scale.

Example sentences

  1. Our gross margin is 78 percent, mostly because hosting costs are low.

  2. If we buy in larger volumes, gross margin should rise to about 40 percent.

Common collocations

  • high gross margin
  • improve gross margin
  • gross margin per order
  • gross margin percentage
  • revenueThe total money a company earns from selling its products or services in a period, before any costs are taken away.
  • unit economicsThe revenue and costs connected to one unit of the business, such as one customer or one order, which show whether each sale makes or loses money.
  • profitableMaking more money than it spends, so that a business has money left after paying all its costs over a period.
  • lifetime valueThe total revenue or profit a company expects to earn from one customer during the whole time that customer keeps buying, often shortened to LTV.

More terms: Unit Economics & Metrics

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