Gross margin is gross profit divided by the selling price: (price − cost) ÷ price. A $9 cookie that costs $3 to make has a $6 gross profit and a 67% gross margin — two thirds of every dollar of revenue survives the direct cost of making it. It is the single clearest gauge of whether your pricing leaves room for everything that comes after.
Margin is routinely confused with markup, and the confusion is expensive. Markup measures profit against cost; margin measures it against price. The same $3-to-$9 cookie is a 200% markup but a 67% margin — identical dollars, very different percentages — so quoting the wrong one to a wholesale buyer or pricing tool can quietly gut your profit.
Because Ardent Seller builds a real per-unit cost from your recipes and purchases, the gross margin it shows reflects what a product actually costs today rather than a guess, and it moves as ingredient prices drift.
Related terms
Markup
The amount added to an item’s cost to reach its selling price, expressed as a percentage of cost — and distinct from margin, which is measured against the price.
COGS (Cost of Goods Sold)
The total cost of materials, labor, and overhead directly tied to producing the goods you sell. Tracked automatically through purchases, recipes, and production runs.
Net Profit
What remains after all costs — direct costs of goods sold plus overhead, fees, and taxes — are subtracted from revenue. The true bottom line.
Pricing Tier
A named pricing configuration (like retail, wholesale, or market) that applies a markup or adjustment formula to calculate prices. Useful for selling at different price points.