Revenue minus the direct cost of the goods or services you sold.
Gross profit is what you have left after paying for the things you sold — before rent, staff, marketing, or anything else. If you sell £100,000 of products that cost you £60,000 to buy, your gross profit is £40,000. That £40,000 needs to cover everything else and leave you with net profit.
Gross Profit = Revenue − Cost of Goods Sold (COGS)Gross profit is the pool of money from which all other business costs are paid. If it's too small, no amount of cost-cutting will save you — the fundamental economics of what you're selling are broken. Tracking gross profit by product tells you which lines are carrying the business and which are dragging it down.
Upload your sales data. Ask "What is my gross profit this month?" or "What is gross profit by product category?" AskBiz calculates gross profit and gross margin for every dimension of your business and ranks products from most to least profitable.
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A café owner uploads their POS data. AskBiz calculates overall gross profit of 68%. But breaking it down: hot food is 72%, cold drinks are 81%, and packaged goods are only 34%. The café shifts its display and upselling focus toward cold drinks based on this insight.
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Gross profit subtracts only direct costs (materials, production). Net profit subtracts all costs including operating expenses, interest, and tax. Gross profit is always higher than net profit.