what are gross sales

Gross sales refer to the total sales of a company before any deductions or costs related to generating those sales are taken into account. Gross sales are calculated by adding all sales receipts before discounts, returns, and allowances together. Gross sales are not the final word in a companys revenue, as they do not account for all the expenses accrued throughout the process of generating the products that have been sold. Net sales, on the other hand, are the sum of gross sales minus any deductions, such as discounts, returns, and allowances. Net sales take into account all the deductions and are a better measure of performance, sales tactics, and product/service quality. Gross sales are generally only significant to companies that operate in the consumer retail industry, reflecting the amount of a product that a business sells relative to its major competitors.