must be prepared to shift between varying perspectives with little effort because decisions can be rounded in any of these perspectives." Investopedia defines "gross margin" as: In contrast, "gross profit" is defined as: or as the ratio of gross profit to revenue, usually as a percentage: Cost of sales, also denominated "cost of goods sold" (COGS), includes variable costs and fixed costs directly related to the sale, e.g., material costs, labor, supplier profit, shipping-in costs (cost of transporting the product to the point of sale, as opposed to shipping-out costs which are not included in COGS), etc. It excludes indirect fixed costs, e.g., office expenses, rent, and administrative costs. Higher gross margins for a manufacturer indicate greater efficiency in turning raw materials into income. For a retailer it would be the difference between its markup and the wholesale price. Larger gross margins are generally considered ideal for most businesses, with the exception of discount retailers who instead rely on operational efficiency and strategic financing to remain competitive with businesses that have lower margins. Two related metrics are unit margin and margin percent: "Percentage margins can also be calculated using total sales revenue and total costs. When working with either percentage or unit margins, marketers can perform a simple check by verifying that the individual parts sum to the total." To verify a unit margin ($): Selling price per unit = Unit margin + Cost per Unit To verify a margin (%): Cost as % of sales = 100% − Margin % "When considering multiple products with different revenues and costs, we can calculate overall margin (%) on either of two bases: Total revenue and total costs for all products, or the dollar-weighted average of the percentage margins of the different products." Use in sales Retailers can measure their profit by using two basic methods, namely markup and margin, both of which describe gross profit. Markup expresses profit as a percentage of the cost of the product to the retailer. Margin expresses profit as a percentage of the selling price of the product that the retailer determines. These methods produce different percentages, yet both percentages are valid descriptions of the profit. It is important to specify which method is used when referring to a retailer's profit as a percentage. Some retailers use margins because profits are easily calculated from the total of sales. If margin is 30%, then 30% of the