Someone wrote this deleted comment, which I started replying to: > I'm having trouble envisioning what sort of SAAS startup's only operating cost is the price

Someone wrote this deleted comment, which I started replying to: > I'm having trouble envisioning what sort of SAAS startup's only operating cost is the price of their domain. I understand that "operating costs" (also development costs) are deducted only from net, not gross profit? In other words, if I buy a nail from a wholesaler for $0.25 and sell it to you for $1.00 I've made gross profit of $0.75 (because I subtract what I bought it for.) I thought my operating expenses weren't involved? By that metric, if I buy a license to resell a "wholesaler's" ebook (proxy product) or software license for $1 and sell it to you for $5, that implies gross profit of $4 (or 80%). On the other hand, if i had written the ebook or software myself and it costs me $0 to email it to you / email a license, I would make $5 gross profit ($5 from you plus $0 to generate a license key which I can do for free), yielding 100% gross profit. Isn't that what these words mean? btw since the comment had read "I'm having trouble imagining" and then got deleted, perhaps they did imagine some examples - could that poster share?