What is Gross Margin?

Gross margin is the difference between revenue and COGS, as a percentage. With the median e-commerce net profit at 3%, this number determines viability.

Formula

Gross Margin (%) = ((Net Revenue - COGS) / Net Revenue) × 100

Example

If you had $10,000 in net revenue (after returns and discounts) and COGS of $4,000, gross margin = (($10,000 - $4,000) / $10,000) × 100 = 60%.

Margyn

Margyn calculates CM1 and CM2 contribution margins alongside gross margin, at the product level.

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What is Gross Margin? | Margyn Glossary