Gross Margin vs. Net Margin

Both margins use revenue as the denominator, but the numerators differ: gross margin divides gross profit (revenue minus COGS only) by revenue, while net margin divides net profit (after every expense) by revenue. A business with a high gross margin and a low net margin has healthy production economics but expensive overhead relative to its sales.

Comparing margins across companies only makes sense within the same category — gross margin in particular varies enormously by industry (software commonly runs 70-90%, grocery retail commonly runs under 30%), so a "good" margin has no universal benchmark outside its own category.