Difference between Gross margin and trade margin

Question

Accepted Answer

Gross margin is the difference between revenue and the cost of goods sold, while trade margin is the difference between the selling price and the cost price.

Gross margin is a measure of profitability at the product level, while trade margin is a measure of profitability at the transaction level.
Gross margin considers all costs associated with producing and delivering a product, while trade margin only considers the cost of acquiring the product.
Gross margin is typically expressed as a percentage, while trade margin is usually expressed in monetary terms.
For example, if a product has a selling price of $100 and a cost price of $70, the gross margin would be $30 (30%), while the trade margin would also be $30.

Accepted Answer

Trade margin is difference between sales price and cost price while gross margin is difference between sales price less COGS.

Difference between Gross margin and trade margin

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