Gross margin: Definition, Formula & Why It Matters
Also called: Gross profit margin
Gross margin is the percentage of a sale left after the cost of the item itself, before fees and operating expenses. It measures the raw spread on your gear and is a quick gauge of whether a product is worth selling at all.
Gross margin formula
Example
Selling a $300-cost item for $640 gives a gross margin of (640 − 300) ÷ 640 = 53.1%.
Why it matters for Reverb sellers
Gross margin shows the ceiling on your profitability. If the gross margin is thin, no amount of fee optimization will make the item a good earner, because the spread was never there to begin with.
How Verbstack helps
Verbstack reports gross and net margin on every listing so you can spot weak products before they pile up.
Try it yourself with the Reverb Profit Margin Calculator.
Track this on every order, automatically.
- ✓ Real fees, margins, and profit on every Reverb sale
- ✓ COGS and inventory tracked for you, no spreadsheet
- ✓ Full history and a live monthly P&L
Free forever to get started. No credit card required.
See this number on every order.
Connect your Reverb shop and Verbstack tracks your fees, margins, and profit automatically.
Get started freeFree forever to get started. No credit card required.