Gross Processing Margin - GPM

The gross processing margin (GPM) is the difference between the cost of a commodity (the input) and the total sales income from the finished product made with the commodity (the output).

As a consumer, you can do this backwards, too. For instance, Cody (of Cody’s Lab) deconstructed a $7,000 gold Rolex to figure out just how much the raw commodities of the watch cost based on their weights (spoiler alert: definitely less than $500 total in raw commodity form...and not that much gold).

Since both the prices of commodities as inputs and commodities as outputs are changing, there’s an always-in-flux spread between inputs and outputs. The GPM makes that spread visible to those in the input-output business.