Google Ads Help
Official documentation for campaign structure and measurement basics.
Visit tool →Gross Margin Calculator
Revenue minus cost of goods sold, expressed as percent of revenue.
Calculator
Gross margin
47.03%
Results are simplified estimates for educational purposes only and should not be treated as financial, accounting, legal, or tax advice. See our disclaimer for details.
Overview
A simple merchandise margin view before rent, salaries, and other overhead. Agree with finance whether shipping and marketplace fees belong in cost of goods so comparisons stay fair.
Formula
(Revenue − COGS) ÷ revenue × 100.
Example calculation
Using the default example values from the JSON seed for this tool:
- Revenue
- 185000
- Cost of goods sold
- 98000
Result: 47.03% (Gross margin)
How to interpret this result
Revenue minus COGS as a percent after you agreed what sits in COGS.
Shipping, marketplace fees, and discount timing still follow Finance’s usual rules.
Useful product-level check before adding full company overhead.
When to use this calculator
- When product-level margin needs revenue minus plain COGS first
- Before full-company overhead talk hijacks storefront-level checks
- When marketplace fees genuinely belong beside COGS in your notebook
- When promos materially shrink net revenue in the numerator path
Rule of thumb
COGS wording must match finance: fees in or out changes the headline.
Terms used in this calculator
- Gross margin
- Sales minus COGS as a percentage of revenue—nothing below gross profit counted here.
- AOV
- Average order size: slice revenue divided by order count—with tax/shipping counted the same each month.
Common mistakes
- Treating net margin language as gross without relabeling.
- Omitting marketplace fees your books park inside COGS.
- Using list price while promos already hit revenue.
What to do next
Drop into Shopify margin, pricing, or refund tools when real product costs differ from the spreadsheet.
How to improve this result
- Negotiate supplier terms impacting COGS materially.
- Understand marketplace fee treatment inside COGS denominators consistently.
- Forecast promotional calendars when discount-heavy weeks compress margin.
Recommended tools
Useful tools for this calculator
These tools are related to the topic of this calculator. Some links may be partner links.
ProfitWell
Pricing and retention resources for subscription businesses.
Visit tool →Shopify
Partner linkCommerce platform for building and scaling an online store.
Visit tool →FAQ
- Include shipping?
- Only if everyone agrees it belongs with COGS for this SKU class.
- Marketplace commissions?
- Often treated like COGS for sellers—confirm your books.
- Discount-heavy months?
- Use net revenue after promos in the numerator path.
- Versus Shopify margin tool?
- Widen COGS here to mimic that tool if you want parity.
Related calculators
Break-Even ROAS Calculator
Minimum ROAS on attributed revenue equal to 1 ÷ gross margin decimal when margin is stable.
Open calculator →Simple Net Profit Calculator
Revenue minus a lump of operating expenses you chose to sum for a planning pass.
Open calculator →Product Pricing Calculator (Cost + Margin)
Cost-plus shelf price implied by landed cost plus target gross margin %.
Open calculator →Shopify Profit Margin Calculator
Margin percent after product, shipping, and payment costs measured against selling price.
Open calculator →Affiliate disclosure
Disclosure: Some links on this page may be affiliate links. If you sign up or make a purchase through these links, FounderCalc may earn a commission at no extra cost to you. We only recommend tools that are relevant to the calculator topic.