Yusuf Bayrak
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    E-Commerce Tools

    Profitability calculators for e-commerce brands and online stores. Enter your product costs (COGS) to see gross margin, then add operating and advertising expenses to see the net margin that actually lands. A solid base for pricing and ad budget decisions.

    //Tools in this category

    Gross Profit Margin Calculator

    Enter revenue and COGS to see gross margin as a percentage and an amount.

    Net Profit Margin Calculator

    Include every expense to see the true net profitability of your business.

    //Guide

    Why revenue is the wrong measure of e-commerce health

    Growing monthly revenue does not mean the business is earning. Once product cost, shipping, returns, marketplace commission, payment processing fees and ad spend are deducted, high revenue often collapses into a thin margin. The headline metric in e-commerce is therefore not revenue but gross and net profit margin.

    Gross profit margin: the starting point for pricing

    Gross profit margin is what remains from sales revenue after cost of goods sold (COGS), expressed as a percentage: (Revenue - COGS) / Revenue × 100. It tells you whether your pricing is sound at product level and sets the ceiling on how much you can afford to spend on marketing.

    Net profit margin: what actually reaches your pocket

    Net profit margin takes gross profit and deducts every remaining cost — advertising, payroll, shipping, software, commissions and tax — as a share of revenue. A store with a 45% gross margin can end up near 5% net depending on ad intensity. Growth decisions should be made on net margin.

    Reading margin and ROAS together

    Judging ad performance on ROAS alone is misleading. Break-even ROAS = 1 / gross profit margin: for a store running a 30% margin, any campaign below 3.3x ROAS destroys value. Once you know your margin, deciding which campaign to switch off stops being a guess and becomes arithmetic.

    In what order should you use these tools?

    Start with the Gross Profit Margin Calculator at product level and flag the low-margin SKUs. Then use the Net Profit Margin Calculator to add every store-wide cost and see real profitability. Finally, run the ROAS Calculator and compare campaign return against your break-even threshold. These three steps feed every pricing, budget and assortment decision.

    //Frequently Asked Questions

    What is a good gross profit margin in e-commerce?

    It varies by category. General retail and electronics typically run 20-35%, fashion and home textiles 45-60%, cosmetics and supplements 60-80%. For a business that grows through paid advertising, a gross margin of at least 40% is usually required to absorb acquisition costs.

    What is the difference between gross and net profit margin?

    Gross margin deducts only cost of goods sold and reflects the health of your pricing. Net margin deducts every cost — advertising, shipping, commissions, payroll, software and tax — and reflects what the business actually earns. Gross margin measures potential; net margin measures outcome.

    Where does ad spend belong in the margin calculation?

    Ad spend is not part of COGS; it is an operating cost that sits below gross profit and belongs in the net margin calculation. For product-level decisions, subtract the ad cost allocated per unit from gross margin to get contribution margin, which is the more accurate figure.

    How should returns and shipping costs be handled?

    If you do not charge shipping to the customer, add it as a direct cost in the net margin calculation. Model returns as return rate × average order value and deduct it from revenue; in high-return categories this line alone can pull net margin down by several points.

    How do marketplace commissions affect profitability?

    Marketplace commissions usually run 8-20% of the sale and, together with payment processing fees, come straight off revenue. When comparing your own store to a marketplace, model the same product in both scenarios: marketplace traffic looks free, but the commission often costs about as much as paid acquisition.

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