Back to Tools
Profit Margin Calculator
Calculate your gross and net profit margins instantly. Understand your true profitability after all costs.
Ready to Calculate
Enter your product details and click "Calculate Profit" to see your profit margins
Understanding Profit Margins
Profit margin is one of the most important metrics for any e-commerce business. It tells you exactly how much money you keep from each sale after factoring in costs.
Key Metrics Explained:
- • Gross Profit: Revenue minus the cost of goods sold (COGS). This shows your basic product profitability.
- • Net Profit: The actual profit after ALL expenses (marketing, shipping, fees, etc.) are deducted.
- • Margin vs. Markup: Margin is profit divided by revenue. Markup is profit divided by cost. They are often confused!
Tips for Improving Margins
1
Optimize Shipping Costs
Negotiate rates or adjust packaging to reduce dimensional weight.
2
Review Marketing Spend
Ensure your CAC (Customer Acquisition Cost) allows for a healthy margin.
3
Bundle Products
Increase Average Order Value (AOV) to spread fixed costs over more revenue.