Gross margin: definition, example, and why it matters
Used to compare profitability across jobs and trades. A 50% gross margin means half of every dollar collected is profit before overhead. Service-heavy trades aim for 50–70% gross margin on labor.
Short definition. Profit as a percentage of the sell price (price − cost) ÷ price.
Category. Gross margin is a invoicing term used by service businesses when billing customers.
How Glo Invoice handles it. Glo Invoice builds gross margin into the invoice itself, so you don't track it on paper or in a spreadsheet.
Frequently asked questions
What does gross margin mean?
Used to compare profitability across jobs and trades. A 50% gross margin means half of every dollar collected is profit before overhead. Service-heavy trades aim for 50–70% gross margin on labor.
Related terms
Markup — The percentage added to your cost to determine the customer-facing sell price.
