Pricing
Gross Margin Benchmarks for Indian D2C FMCG 2026
Model this for your store in the Unit Economics Planner.
What's in the line
Gross margin here is revenue minus COGS (formulation + packaging + inbound freight). It does not include channel fees, last-mile fulfilment, or returns. That's why D2C founders calling gross margin 'profit' overestimates the picture.
Lifting gross margin
Three levers: formulation cost reduction (works at scale), packaging consolidation across SKUs, vendor renegotiation at 1Cr+ annual COGS commitment. Each takes 6–12 months.
Frequently asked questions
How is gross margin different from CM1?↓
Gross margin = revenue − COGS. CM1 = gross margin − channel fees − fulfilment − returns. CM1 is the more honest single number for unit economics.
What gross margin does a brand need to reach EBITDA-positive?↓
Rule of thumb for Indian D2C: gross margin above 55% gives meaningful EBITDA-headroom after CAC and overhead. Below 45% requires very high efficiency or repeat behaviour.
Does private-label give better gross margin than co-pack?↓
Yes, by 5–12pp typically, but requires inventory commitment and quality oversight that many early-stage brands underinvest in.