Gross Margin on Shoptiuqes POS

To calculate the Gross Margin, you have to know the total sales number and the cost of goods sold (COGS) and subtract the total sales by the COGS. Click here to learn more about how Cost of goods sold (COGS) is calculated. The formula for Gross Margin is as follows:

Gross Profit = Total Sales - Cost of Goods Sold

For instance, a store has sold 10 units of Product A at $100 each and the cost of acquiring the items sold is $380. The Gross Margin will be $620 ($100 x 10 - $380). To put the Gross Margin into perspective, it can be converted into percentage by dividing the Gross Margin by the Total Sales. In this case, the Gross Margin % will be 62% ($620/$1000 x 100%). The higher the Gross Margin %, the higher the profitability the store would have. 

Gross Margin and Gross Margin % are two key metrics that indicate the profitability of sales. Two stores could have the same total sales, but if one of the stores has a higher Gross Margin and Gross Margin % than the other one, we could conclude that the store with a higher margin generates a higher return and is more profitable.  

Where could you find the Gross Margin on SPOS?

• Best/Worst Sellers: it shows the COGS and Gross Margin of the best or worst sellers
• Sales by Employee: it shows the COGS and Gross Margin of the sales made by each employee
• Sales by Location: it shows the COGS and Gross Margin of the sales made in each location