← Back to glossary Category: Financiar Gross Margin Quick answer: The difference between revenue and cost of goods sold, usually expressed as a percentage of revenue. Key takeawaysPurchase cost and landed costDiscounts and promotionsProduct 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 Azuvio helps Azuvio 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. Frequently askedGross 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 Azuvio fitsSoftware OMSConectori ERPSoftware WMS Related termsEBITDA — Operating profit before interest, taxes, depreciation and amortization — a measure of operating performance.GMROI (Gross Margin Return on Inventory) — The metric showing how many euros of gross margin you generate for each euro invested in inventory.Profit and loss statement — Financial statement showing a company's revenues, expenses and result (profit/loss) over a period.Landed Cost — The total real cost of a product up to the warehouse: purchase price + freight + duties + insurance + handling. Last updated: 2026-07-06