E-Commerce Margin Calculator

Margin tells you how much of every sales dollar you actually keep. Gross margin isolates product economics; net margin includes everything else the business costs to run. Both matter — a store can have healthy gross margins and still lose money on ads and overhead.

Inputs

Revenue

COGS

Direct cost of the products sold.

Operating expenses

Ads, software, salaries, shipping, everything else.

Results

Gross margin

60.0%

Net margin: 30.0%
Gross profit: $9,000.00
Net profit: $4,500.00

Many healthy e-commerce businesses run gross margins of 40–60%. Net margins above 10% are strong for most online retail models.

Formula

Gross Margin = (Revenue − COGS) / Revenue · Net Margin = (Revenue − COGS − OpEx) / Revenue

FAQ

What's a good e-commerce gross margin?

It depends on the model — private label typically needs 50%+ to absorb ads and fulfillment, while dropshipping can work with less because it carries less inventory risk.

Is shipping part of COGS?

Inbound shipping to get products to you is usually COGS. Outbound shipping to customers is typically an operating cost — either way, be consistent so your margins are comparable over time.