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Profit Margin Calculator for Online Stores

Profit margin shows how much of each dollar in revenue you keep. Online stores should track three versions: gross margin, contribution margin and net margin. Each one points at a different lever, from pricing to ad efficiency to overhead.

Gross margin–
Contribution margin–
Net profit margin–
Net profit–

The formula

Net profit margin = (revenue − all costs) ÷ revenue

How to use this calculator

  1. Enter revenue for a period, such as last month.
  2. Add cost of goods sold, then variable costs like shipping, fees and returns.
  3. Add marketing and fixed costs to get net profit margin.

Want the full picture? Read the guide: Contribution Margin for E-commerce: Formula, Examples and Benchmarks.

Frequently asked questions

What is a good profit margin for an online store?

Many DTC brands run 5–10% net margin. Gross margins of 50–70% are common for own-brand products, while resellers and dropshippers often sit at 20–40%.

How do I calculate profit margin?

Subtract the relevant costs from revenue and divide by revenue. For net margin, subtract every cost. For gross margin, subtract only product cost.

Which margin should I use to judge ads?

Contribution margin before marketing. It tells you how much you can afford to spend to win an order, which sets your break-even ROAS.

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