E-commerce Profit Margin Calculator
Calculate both gross margin and net margin for your online retail products by factoring COGS, shipping, marketplace fees, and advertising.
Gross & Net Profit Margin Formulas
Gross Margin = (Price - COGS) / Price × 100; Net Margin = [Price - (COGS + Fees + Shipping + Ads)] / Price × 100- Gross Profit: Revenue minus direct product manufacturing cost (COGS).
- Gross Margin %: Percentage of revenue left after product costs to pay for operations and marketing.
- Net Profit: What remains after paying COGS, payment fees, pick-and-pack shipping, and advertising CAC.
- Net Margin %: The true bottom-line profitability percentage kept by the business.
Step-by-Step Worked Example
Calculation Steps:
How to Use This Calculator
Assumptions & Limitations
- COGS includes factory unit price and allocated inbound freight per unit.
- All variables scale on a per-order basis.
Frequently Asked Questions
Why can a product have a great gross margin but negative net margin?
A product with an 80% gross margin can still lose money if customer acquisition cost (ad spend) or heavy shipping fees exceed the remaining gross profit.
What is a typical net margin for an e-commerce store?
Average e-commerce net profit margins typically range between 10% and 20%, with exceptional brands exceeding 25% through high repeat purchase rates.
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