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PRATHAM
•

Medial • 1y

Gross margin is crucial for startups - but what is it exactly? ( Let's Discuss How You Consider Gross Margin ) Gross margin represents the percentage of revenue left after paying for direct costs associated with producing goods or services. It's calculated by subtracting cost of goods sold (COGS) from total revenue and dividing by revenue. For startups focused on SaaS or services, COGS may include infrastructure costs, developer salaries, contractor fees. For e-commerce, it's the cost to obtain or manufacture inventory. Higher gross margins mean more revenue goes toward core operations and growth rather than direct expenses. But how high is considered healthy? Target 50-60% minimum for most B2B SaaS. Focus on efficient operations and pricing power. Monthly tweaks to gross margin help course correct. Transform revenue vanity metrics into profitable reality. What's your gross margin telling you?

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