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Money & margins

Gross margin

Gross margin is the share of a sale you keep after paying for the item itself, written as a percentage. Sell a coffee for 15 QAR that costs 4 QAR in beans, milk and cup, and your gross margin is about 73%.

Also called: margin · gross profit margin

Margin is more useful than profit in riyals because it lets you compare items of different prices on equal terms. A 300 QAR item earning 30 QAR (10%) is a worse use of your shelf space than a 20 QAR item earning 8 QAR (40%), even though the first sounds bigger.

The trap is confusing margin with markup. If something costs you 10 and you sell it at 15, that is a 50% markup but a 33% margin. Suppliers usually talk in markup and accountants in margin, which is how owners end up believing they make more than they do.

Watch margin over time, not just once. Portion sizes drift, suppliers raise prices quietly, and a dish that was 65% margin at launch can be 45% a year later without anyone changing the menu price. That drift is invisible unless something is costing your recipes continuously.

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