profit margin calculator.
gross and net margin from cost and price
- gross profit
- $30,000
- gross margin %
- 60.00%
- net profit
- $22,000
- net margin %
- 44.00%
> worked example
Revenue of $50,000, COGS of $20,000, and $8,000 in operating expenses. Gross profit lands at $30,000, a 60.00% gross margin. After stripping out the $8,000 opex, net profit is $22,000 and net margin is 44.00%. Leaving opex at zero isolates the gross margin for product-level analysis.
takeaway, Gross margin tells you if the product is viable. Net margin tells you if the business is viable. You need both numbers.
> when operators reach for this
- Shopify DTC founders reviewing a monthly P&L and wanting to confirm gross margin hasn't drifted as supplier costs changed.
- CMOs presenting a channel-level profitability breakdown where opex is allocated per channel and they need net margin by source.
- Merchandisers evaluating whether a new product category can carry its share of warehouse and fulfilment overheads.
- CFOs stress-testing a pricing change, plugging in lower revenue to see at what point net margin turns negative.
- Marketplace sellers on Amazon or Etsy who need to separate platform fees (opex) from product cost (COGS) to get clean margin reads.
> the calculation
- gross profit
revenue − cogs - gross margin %
gross profit ÷ revenue × 100 - net profit
gross profit − operating expenses - net margin %
net profit ÷ revenue × 100Operating expenses are optional. Leave at 0 to calculate gross margin only.