Gross margin tells you what share of your sales revenue is left once you have paid for the goods themselves. It is gross profit, revenue less the cost of goods sold, divided by revenue and written as a percentage, as BDC defines it. Gross profit is the amount in money; gross margin is the same thing as a share of the price.
Take an item that costs you $60 and sells for $100. Gross profit is $40, and the gross margin is 40 ÷ 100, or 40%. Across a whole year the sum is the same, done on totals: if a shop takes $500,000 and its goods cost $320,000, gross profit is $180,000 and the gross margin is 36%.
The figure most often confused with it is markup, which divides the same profit by cost rather than by price. The $60 item above carries a 66.67% markup but a 40% margin. Mixing them up is how a seller who wanted a 40% margin ends up pricing at cost plus 40%, $84, and keeps only 28.6% of the price.
It is also not the profit the business makes. Gross margin stops at the direct cost of what you sold. Rent, salaries, marketing, software and your own time come out afterwards, and what is left after them is the operating or net margin, which is always lower. A 40% gross margin can still lose money if overheads take 45% of revenue.
For a marketplace seller the cost side should include the per-sale fees. The margin calculator works out gross margin from a cost and a price, or solves for the price that hits a target margin, and the Amazon FBA and Etsy fee calculators give you the fees to add to cost first.