The total amount of sales (sales/ revenues) that a business generates minus the total cost of the goods sold (COGS). For a product, it is the selling price minus the cost of production (per unit or a line of products, etc.) For a service business, it’s the selling price of the service minus the cost of the resources and time spent delivering the service to a client.

Gross profit refers to total sales (also known as turnover) net of all relevant costs (the total cost of sales). Gross profit includes the costs of selling an item such as delivery charges to and any sales commissions. It also includes the cost of preparation and transportation of an item or parts of it from suppliers for a production process, and any modifications that a business makes before sale to its customers.