March 15, 2022

Gross Margin

Profit is highly dependent upon the gross margin of the products we sell.

You already know that, of course.

But do you ever actually analyze the situation?

Here are the top 500 selling items for a brand. What does the regression line tell you?

On the X-Axis we observe annual sales ... the best sellers have an average gross margin percentage under 45% ... while other good-selling items have gross margin percentages that average over fifty percent.

Now I get it ... you're going to tell me all the reasons why certain items have to be priced at a certain level, compromising gross margin percentages. I get it. 

But the marketers in the audience, given two equal items, should promote the item that has a better gross margin percentage, correct?

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