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Gross Profit Definition

Marketing Definitions

16 Aug 2019 • 1 min read • Austin shong

Gross Profit Definition

What is Gross Profit?

Gross profit definition: gross profit is the amount of money a company earns from sales after the cost of doing business.

Gross profit is calculated once costs including – but not limited to – the following have been deducted:

  • Advertising
  • Creation
  • Delivery
  • Employment
  • Marketing

These costs are typically estimated in the initial pricing of a product or service, but will often be recalculated based on the actual number of sales made.

A simple example would be:

  • Nike sells a training t-shirt for $20
  • $12 is required to fund the creation and marketing
  • Nike earns a gross profit of $8 per shirt

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