Margins: Gross vs. Net

Point of interest: Gross margins refer to your sales (revenue) minus the cost of goods sold (COGS). So if a store buys beer at $4 a sixpack and sells it at $6 a sixpack, the gross margin is $2, or in this case 33%. Net margins are what’s left after paying for everything else: salaries, rent, electricity, etc. Net margins = profits. It’s what you get taxed on.