What is left from a sale after direct costs, before operating expenses are subtracted.
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ProdLinc Editorial
ProdLinc Team
Published Jan 12, 2026
2 min read
Quick answer
Gross margin is revenue minus the direct cost of what you sold, usually shown as a percentage of revenue. It tells you how much of each sale is left before rent, salaries, and other operating expenses come out.
If a product sells for 100 SAR and costs 40 SAR to produce, the gross margin is 60 SAR, or 60 percent. That 60 SAR still has to cover operating expenses before anything counts as real profit.
Watching gross margin over time is one of the fastest ways to notice a pricing or cost problem, since it moves before net profit does.
