Gross Margin Explained: Profit Fundamentals for Toy & Miniature Sellers
Gross Margin is the percentage of revenue retained after subtracting the cost of goods sold (COGS). It measures how efficiently a business generates profit from each product before operating expenses.
In toy, miniature, and Amazon retail, gross margin determines whether a SKU can sustainably remain on an Amazon stocklist. Sellers analyze margins when selecting trending toys, evaluating Amazon FBA products, or reviewing offers from a toy wholesale supplier. Higher gross margins typically indicate healthier pricing power and allow room for promotions, PPC, and seasonal fluctuations. Profitable toys wholesale categories often target margins that comfortably absorb freight, prep, and FBA fees.
Example in practice:
A retailer buys Deadzone faction boxes at £28 and sells them for £50. After COGS, the gross margin is 44%, providing enough room for ads and bundle strategies.
Why does this matter?
Gross margin directly impacts:
- Profitability
- Scalability
- Long-term business stability
