3 ms·
SaaS has really high gross margins (>65%?), but I'm not sure that gross margin number is comparable with the 25% that Tesla reported.
by alteria 6y ago
SaaS has really high gross margins (>65%?), but I'm not sure that gross margin number is comparable with the 25% that Tesla reported.
- llsf 6y agoDoes anybody know why Saas on average have such high gross margin ?
- jlbnjmn 6y agoIt doesn't cost much to add a user to SaaS, but it costs a lot to write the software and convince people to pay for it. Gross margins are calculated from per unit costs, so advertising expenses, servers, supporting SaaS, and the salaries of programmers and sales people are not included. Also, physical products are made from relatively scarce resources. Software is typed, and words are not scarce. SaaS companies have benefited from demand outstripping supply. SaaS replaces human labor, so it takes a SaaS competitor to drive down prices.
- Rury 6y agoGross margin = (Revenue - COGS) / Revenue. So reason is very low costs... being that there is almost no physical inventory/material costs involved. Just servers, a few programmers to make and maintain things, any other staff, and whatever bills they have (e.g. electricity/internet/advertising/fees from software they use).
- alteria 6y agoGross Margin = Revenue - Cost of Goods Sold SaaS usually don't include development costs into COGS. Only directly attributable costs (hosting, customer support, etc.) Tesla on the other hand has to include raw materials and even labor into COGS.