What is gross margin?
Gross margin is the percentage of revenue left after cost of goods sold (COGS). Formula: Gross margin % = (Revenue − COGS) ÷ Revenue × 100. It shows how much you keep per dollar of sales before marketing, shipping, and overhead.
Enter your revenue and COGS below to get gross profit and gross margin %.
Gross profit$6,000
Gross margin60.0%
Healthy — many ecommerce brands aim for 50%+.
Why gross margin matters
Gross margin drives how much you can spend on acquisition (CAC) and still be profitable. Use our LTV Calculator and Product Profitability Analyzer for deeper analysis.
FAQ
- What is gross margin?
- Gross margin is (Revenue − COGS) ÷ Revenue × 100. It shows what percentage of revenue is left after direct product costs. It does not include marketing, shipping, or overhead.
- What is a good gross margin for ecommerce?
- Many ecommerce brands aim for 50%+ gross margin. 40–50% is common; below 40% is tight. Use our Product Profitability Analyzer to see margin by product.
- Is this gross margin calculator free?
- Yes. Free with no signup. For product-level margin see Product Profitability Analyzer; for break-even see Break-Even Calculator.