The study examined the gross margins in small-scale modern groundnut oil extraction of RMP-12 and Ex-dakar varieties in Gombe Metropolis Nigeria. The focus was on the profitability of the business, marketing efficiency and marketing margins differentials between the respective groundnut varieties. The study area was delineated into six market districts where two markets were selected for their popularity in groundnut oil processing. A multi-stage sampling technique was used to select 90 groundnut oil processors. Data were collected using structured questionnaires and were analysed using descriptive statistics, farm budgeting tool, profitability indices, sherphered-futrel model and t-test analysis. The study concluded that the business was profitable and the Ex-dakar variety gave higher net income . Major impediments to profit and market efficiency were inadequate capital, high costs of shelled groundnut, transportation costs and long marketing channels. It is therefore recommended that, the traders should have access to formal loans so as to improve productivity and efficiency.