Profit Margin Calc – Gross, Net % of Revenue

Margin expresses profit as a share of revenue, which makes products and periods comparable. Subtract total costs from revenue, divide by revenue, and multiply by 100. Worked example: $12,000 of sales carrying $7,200 of combined product, fulfillment and ad costs leaves $4,800 profit — a 40% margin. A 40% margin means 40 cents of every sales dollar survives as profit. Always divide by revenue, not by cost: dividing by cost would give markup (66.7% here), a different and commonly confused metric.

1. 1

   Enter revenue

   Total sales for the product or period.

2. 2

   Enter total costs

   COGS plus fulfillment, ads and allocated overhead.

3. 3

   Read margin %

   Profit share of every sales dollar.

• Dividing profit by cost instead of revenue — computing markup by accident

• Ignoring ad and fulfillment costs that ride on every order

• Comparing gross margin to a competitor's net margin