Gross Margin

COGS measures the direct cost of producing what you sell. This article breaks down the calculation, compares it to operating expenses, and explains its impact on unit economics.

Contribution margin measures profitability at the unit level. It is the revenue remaining after subtracting variable costs, used to pay down fixed costs and eventually generate profit.

Gross margin measures the percentage of revenue retained after direct costs. This article breaks down the calculation, industry benchmarks, and why it dictates your startup’s ability to grow.