First of all, in cases, you either do the calculations on the product level or on the company level. You rarely jump from one to another.
On a product level, usually, you compare your unit economics with the competitors and there may be 2 options:
1) You calculate contribution margin per product which is price minus all variable costs of sales per this product. The difference between the contribution margin and gross margin is that fixed overhead costs are not included in the contribution margin.
- Price per unit
- Variable Costs per unit
- CM = Price per unit - variable costs per unit
But sometimes in the cases, they may still call it gross margin fro simplicity. You can calculate as a % as well
2) You compare net margin per product:
- Cost per product that already includes variable costs and fixed costs allocation
- Price of product
- Net Margin = Price per product - Cost per product