How Can Brands Estimate Gross Margin Before Confirming Factory Orders?

Estimate gross margin by subtracting cost of goods sold from net sales, dividing the result by net sales, and multiplying by 100.

Use consistent accounting definitions and distinguish gross margin from markup, which uses cost as its denominator. For pre-order planning, account for expected selling prices, discounts, and the product costs included in your chosen definition. Review marketing, fulfillment, and overhead separately when assessing profitability beyond gross margin.