Revenue minus the direct cost of goods sold, as a percentage of revenue. Gross margin sets the ceiling on everything you can afford to do, the more of each sale you keep before shipping and marketing, the more room you have to acquire customers profitably. It is necessary but not sufficient: a great gross margin can still produce a negative contribution margin once shipping and CAC are in.
Benchmark. Healthy DTC brands typically run 60-80% gross margin, enough room for shipping, fulfilment and acquisition. Beauty and supplements run higher (60-82%), apparel and electronics lower (30-65%); below about 50%, growth usually becomes very hard to fund.