to achieve a specific gross margin. For example, if your product costs $100 and the required gross margin is 40%, then Gross margin tools to measure retail performance Some of the tools that are useful in retail analysis are GMROII, GMROS and GMROL. GMROII: Gross Margin Return On Inventory Investment GMROS: Gross Margin Return On Space GMROL: Gross Margin Return On Labor Differences between industries In some industries, like clothing for example, profit margins are expected to be near the 40% mark, as the goods need to be bought from suppliers at a certain rate before they are resold. In other industries such as software product development the gross profit margin can be higher than 80% in many cases. In the agriculture industry, particularly the European Union, Standard Gross Margin is used to assess farm profitability. References "Relationship between Markup and Gross Margin" Accounting terminology Corporate finance Financial ratios Management accounting Profit