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TeachMeFinance.com - explain gross margin gross margin -- Gross Profit/Total Sales. The percentage of every dollar earned that can be used to pay general and administrative expenses. another definition... gross margin -- (1) the difference between the total sales revenue and the cost to the seller of the items sold. (2) an amount, expressed as a percent, which is stated in the terms of a loan and which is added to the percentage expressed by a controlling rate index to establish the rate the borrower pays on the loan. About the author Mark McCracken Author: Mark McCracken is a corporate trainer and author living in Higashi Osaka, Japan. He is the author of thousands of online articles as well as the Business English textbook, "25 Business Skills in English". Copyright © 2005 by Mark McCracken, All Rights Reserved. TeachMeFinance.com is an informational website, and should not be used as a substitute for professional financial or legal advice. TeachMeFinance.com and its owner recommend consultation with a professional financial advisor prior to any investment or financial decision. Please read our disclaimer.