Ep 171: The gross margin lie: your mark-up math is wrong

About this episode

Stuart and Mena discuss the common miscalculations in gross margin and their implications on business operations.

Send us Fan Mail You think you’re making 40%. In reality, you might be making 15%. In this episode, Stuart and Mena expose the “mark-up illusion”, the common mistake of calculating margin on materials alone while ignoring direct labour, superannuation, payroll tax, leave entitlements, contractor equivalents, and production-related costs. When gross margin is miscalculated, everything downstream breaks: pricing, hiring, scaling, and cash flow planning. They walk through a simple example that s...

People in this episode

Hosts: Stuart Wemyss, Mena Abraham

Topics covered

• gross margin
• mark-up illusion
• pricing strategy
• cost calculation
• business finance

Keywords

• gross margin
• mark-up
• business costs
• pricing
• cash flow

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