zlacker

Why do people even calculate or care the gross margin percentage outside of manufacturing and retailing?

I genuinely fail to see why and how it's a number with any meaning. For example, a plumber fixed your house's pipe. He charged mostly for his time instead of the tools and materials he used (righteously). If you count his 'gross margin percentage' it might be higher than Apple. Does it mean anything?

>>rainco+(OP)
It doesn't mean anything because you're comparing the plumber with Apple, but if you compare plumbers to each other, or possibly even a plumber to an electrician, it could be useful.

>>rainco+(OP)
The plumber hourly wage is to be deducted from his margin. Just as Apple's costs for running the payment system and platform are deducted.

> I genuinely don't know why and how it's a number with any meaning.

It has meaning in the context of Apple arguing that their fees are that high because they have to maintain said infrastructure.

Which leads to the question "how come there is no competition to lower such high margins?", which in turns questions whether any competition in unfairly blocked by Apple.

In a totally frictionless market, profit margins are usually low. Very high margins are often a sign of a closed market where _somehow_ competition cannot emerge.