Pricing, gross profit and margin leakage
Guides and calculators for GP, markup, package pricing, discounting and profit leakage.
What this covers
Pricing and margin problems show up when sales increase but owner earnings do not. The useful question is not only what sold, but how much gross profit was left after direct costs, discounting, waste, rework, freight, fees and staff delivery time.
What is the difference between GP and markup?
Gross profit is profit as a share of selling price. Markup is profit as a share of cost. They are related, but they are not the same number.
Can more sales make profit worse?
Yes. If the extra work has weak margin, slow payment or high delivery cost, volume can increase pressure instead of improving owner earnings.
How often should prices be reviewed?
Review core products, services or jobs whenever supplier costs, wages, freight, rent or demand changes materially. For many small businesses, quarterly is a practical rhythm.