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It also benefits large players as a chain of companies producing a product would have a larger combined revenue than a single company with teams doing the same
by IanCal 7y ago
It also benefits large players as a chain of companies producing a product would have a larger combined revenue than a single company with teams doing the same work.
- zaroth 7y agoIsn’t this just another way of saying “higher gross margin”?
- IanCal 7y agoIf I'm understanding what you mean right, no I don't think so. If we have two companies, one makes a widget and the other buys it and adds a clock to then sell: Cost of making the widget $5, sale price $10 Cost of adding a clock $10, sale price $40 As two companies, the first has a gross margin of $5 and the second $20. If the companies were to combine, they'd have costs of $15 and a sale price of $40 = gross margin of $25. I might not understand the term properly though, I based it on this https://www.investopedia.com/terms/g/grossmargin.asp https://www.investopedia.com/terms/g/grossmargin.asp