For a small online business that has no employees or inventory and only sales info products, does revenue equal gross profits since there is no cost to make the info product?

  • The revenue in this case may be equal to the gross profit if there are truly no cost of goods sold (COGS); however, it would not be equal to operating profit. That is, gross profit less operating expenses. That includes most of the costs Rick mentioned in his answer—advertising, overhead, and maintenance to name a few—expenses not directly related to any one sale. – PJS1987 Dec 4 '13 at 2:39

What about web-hosting fees? Cost of Internet service? Cost of computer equipment to do the work? Amortized cost of development? Time for support calls/email? Phone service used for sales? Advertising/marketing expenses?

Look hard--I bet there are some costs.

  • All operating expenses and not direct cost of making the course. – 4thSpace Dec 4 '13 at 21:05
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    Right. I wasn't reading carefully enough. As @PJS1987 points out in his comment, if there is truly no cost of goods, then the answer to your original question is "yes". Net profit is, of course, a different matter. – Rick Goldstein Dec 4 '13 at 21:30
  • Can you append to your answer? I will accept. – 4thSpace Dec 5 '13 at 22:09

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