Gross sales refer to the total amount of sales made by a company before any deductions or expenses are taken into account. It is calculated by adding all sales receipts before discounts, returns, and allowances together. 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. Gross sales are not typically listed on an income statement or often listed as total revenue.

In contrast, net sales are the amount of sales made by a company after deductions such as discounts, returns, and allowances are taken into account. Net sales are calculated by deducting sales allowances, sales discounts, and sales returns from gross sales. Net sales are a better measure of performance, sales tactics, and product/service quality. By combining gross sales and net sales, a company can get a more accurate representation of its current sales performance and create informed and strategic sales forecasts.