E-Commerce Gross Profit Margin — Products and Shipping
An e-commerce store with $25,000 in revenue and $15,000 in product plus shipping costs has a 40% gross margin.
How to use this tool
- Enter total revenue and cost of goods sold (cogs) in the fields above.
- Results update instantly as you type — or click Calculate.
- Read your gross profit margin and the full breakdown beneath it.
E-commerce gross margin includes product cost and fulfillment — calculate yours to understand how much revenue is left to cover marketing, overhead, and profit.
Frequently asked questions
- What is gross profit margin?
- Gross profit margin = (Revenue − COGS) ÷ Revenue × 100. It measures how efficiently a company produces goods or services. High gross margins (e.g., software at 70–90%) mean more money available for R&D, sales, and profit.
- What costs go in COGS?
- COGS includes direct materials, direct labour, and manufacturing overhead tied to production. It excludes selling, general & administrative (SG&A) expenses, R&D, and interest — those appear below the gross margin line.
- What is a good gross margin?
- Software/SaaS: 70–90%. Retail: 25–50%. Manufacturing: 20–40%. Service businesses: 50–70%. Compare against industry peers rather than a universal benchmark.