Gross Margin Calculator
Calculate your gross profit dollars, gross profit margin %, and COGS percentage from total revenue and inventory manufacturing costs.
Gross Margin Inputs
Gross margin is the percentage of total sales revenue remaining after subtracting direct Cost of Goods Sold (COGS). To calculate gross margin, subtract COGS from total revenue, divide by total revenue, and multiply by 100.
What the Gross Margin Calculator Does
The Gross Margin Calculator evaluates your business’s fundamental manufacturing and product sourcing efficiency. By isolating direct Cost of Goods Sold (COGS) from total sales revenue, this tool reveals how much top-line profit remains to pay for shipping, fulfillment, marketplace fees, marketing campaigns, and business overhead.
Who Should Use This Tool
Amazon & Marketplace Sellers
FBA sellers checking if gross product margins leave enough cushion for FBA pick/pack fees and sponsored product ad campaigns.
Wholesale Brand Manufacturers
Product makers ensuring production COGS allows 50%+ margins when selling wholesale to boutique retailers.
Gross Profit & COGS Terms Defined
Total sales dollars earned before deducting any product expenses.
Direct manufacturing, raw materials, supplier purchase, and landed freight costs.
The total dollar difference between Gross Revenue and COGS.
Gross Margin Formula Breakdown
Worked Example: Amazon FBA Kitchenware Brand
An Amazon brand sells silicone spatula sets priced at $32.00 per unit, generating $8,500 in monthly sales revenue across 265 orders.
Gross Margin vs. Net Profit Margin
Gross margin shows whether your product pricing covers direct factory costs. Net profit margin goes further by deducting fulfillment, ad CAC, merchant gateway fees, and operating overhead.
Common Gross Margin Errors
Frequently Asked Questions
What is a good gross profit margin for ecommerce?
A strong gross margin for direct-to-consumer physical goods ranges between 55% and 75%. This provides enough buffer for advertising, shipping, and payment gateway costs.
Does gross margin include shipping costs?
Gross margin includes inbound freight to get inventory to your warehouse (COGS). Outbound postage to the customer is considered a fulfillment operating expense.
Financial Disclaimer: MerchSites tools and guides provide estimates for product pricing, margin analysis, and expense planning. All calculations are performed locally in your web browser. Content is for educational purposes and does not constitute formal tax, legal, or accounting advice.