
Gross Profit Margin vs Net Margin: Does Your Pricing Survive Your Overhead?
Gross margin tests your pricing; net margin tests the whole business — the gap between them shows whether pricing or overhead eats your profit.
#profit-margins
Calculate, benchmark, and improve profit margins across your business

Gross margin tests your pricing; net margin tests the whole business — the gap between them shows whether pricing or overhead eats your profit.

COGS equals beginning inventory plus purchases minus ending inventory — two careful counts decide your gross profit, pricing, and tax.

Etsy fees are not COGS — they are Schedule C selling expenses. Track materials, labor, fees, and shipping per listing to price for real profit.

Contribution margin per unit is revenue minus variable cost — slice it by product, channel, and customer to see which slices earn their keep.

Break-even units equal fixed costs divided by contribution margin — run it in units and dollars, then guard it with a margin of safety.

Your billable rate must cover income, overhead, and the 15.3% IRS self-employment tax across only the hours you invoice — then add margin.

Target cost equals market price minus required profit — set the price first, then engineer costs down to fit before you launch.

Conagra's Q1 FY2027 EPS rose 5.9% to $0.36 while sales fell 1.4% and volume 2.1%. Lower overhead and a flour-mill joint venture, not food, drove the gain.

Constellation Brands' Q2 FY2027 net sales rose 6% to $2.63B and EPS rose 25% to $3.32. Beer earned $964M at a 39.0% margin; wine and spirits earned $6M.

Lamb Weston's Q1 FY2027 net sales rose 1% to $1.67B while net income fell 55% to $29.1M. Plant-closure and legal charges put $51M into cost of sales.

Ulta's Q2 FY2026 sales rose 8.9% to $3.04B on 3.8% comps, with operating income up 10.1% to $379.6M and no tariff refund in the margin.

BlackBerry's Q2 FY2027 revenue rose 26% to $163.3M on a record $80.3M QNX quarter, lifting net income to $33.9M — a sixth straight GAAP profit.