Expert: Peter Gabany - 3/15/2010

Question
What is the difference between gross cost of merchandise and the total cost of merchandise?

Answer
Nothing


The word gross in this instance is will all manufacturing costs and fees inclusive. It does not (typically) include any taxes as these are born outside of the realm of the company.

The matter often comes up in our industry when people refer to gross vs net costs. Net costs refer to the cost of something that you are willing to charge for a product (throught supplier) where a commission is taken. In media that can be (usually) 15% so the net cost would be about $850. So you would sell to the ad agency for $850 and the agency would sell to the client for $1,000, thus making their commission.

I hope that this helps,

Pete