Should You Target 80% Gross Profit in SaaS? Let’s Break It Down
Episode description
Gross profit is a core metric in SaaS—and 80% is the benchmark often thrown around. But is that still realistic in today’s landscape? In episode #292 of SaaS Metric School, Ben Murray walks through real benchmarking data from Ray Rike’s benchmarks at Benchmarkit.ai and explains how gross profit should evolve as your business scales. He also dives into how to set up your SaaS P&L correctly and what to include in COGS vs. OpEx.
What You’ll Learn:
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What gross profit benchmarks actually look like today
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What is our north star GP%?
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How gross profit changes as you scale
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Common COGS setup mistakes in SaaS businesses
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What to do if your gross profit is trending in the wrong direction
Benchmarks Mentioned:
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Bottom quartile
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Median
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Top performers
Key Insight:
Don’t blindly shoot for 80% at every stage. Under $2M ARR? It’s okay to be lower. But once you’re in the $10–20M+ range, that 80% benchmark becomes more important—and achievable.
Resources:
👉 Learn how to properly set up your SaaS P&L and COGS categories at: https://TheSaaSAcademy.com
ARR Webinar: https://thesaascfo.webinarninja.com/live-webinars/10693368/register
How to Calculate ARR: https://www.thesaascfo.com/how-to-define-and-calculate-arr/