Definition
Gross margin sets the ceiling for everything else: affordable CAC, discount depth, channel viability. Two stores with identical revenue can occupy different universes if one holds 70% margins and the other 25%.
Why it matters
Every acquisition conversation should start here - your break-even ROAS is simply 100 divided by gross margin percentage.
Formula
(Revenue - COGS) / Revenue
Benchmarks
D2C beauty 70-80%; electronics 15-30%; compute yours precisely
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