Gross margin calculator
Free, no sign-up, runs in your browser.
Gross margin answers “what share of each sale do I keep”. It is the number a profit-and-loss statement uses, the number a lender asks for, and the number most sellers quote when they actually mean markup. This calculator computes it after every marketplace fee, which is the only version that means anything to someone selling on a marketplace.
The formula
Margin = profit ÷ revenue. Revenue is what the buyer paid, minus any tax you collected on a government's behalf, and before any of it has been spent.
A worked example
A $29.99 product that lands at $8.00, sold on Amazon FBA in Home & Kitchen, 10×6×3 inches and 20 ounces packed:
| Revenue kept | $29.99 |
|---|---|
| Total fees | $10.35 |
| Total costs | $10.00 |
| Profit per unit | $9.64 |
| Margin | 32.14% |
| Markup | 96.4% |
| ROI | 96.4% |
What to watch
- Margin can never reach 100%, because profit can never exceed revenue. Any tool that offers you a 120% margin is computing markup and calling it margin.
- Marketplace fees come out before margin. A 15% referral fee means a 40% margin needs the same price a 55% margin would need on your own store.
- Margin falls as the price falls, and faster than you expect, because the fixed fees do not shrink with it.
- Compare margin across channels, never margin against markup — they answer different questions and the comparison is meaningless.
The trap
Averaging margins across products. A 50% margin on a $5 item and a 10% margin on a $500 item do not average to 30%; weight by revenue or the blended figure is fiction.
Questions
What is a good margin for e-commerce?
Private-label sellers on Amazon typically aim for 25–35% after fees but before advertising, because advertising then takes a large share of what is left. Below about 20% there is no room to absorb a fee change or a returns spike, which is the real reason thin-margin products fail rather than the thinness itself.
Is margin calculated before or after fees?
Here, after — fees are deducted before the margin is computed, because a marketplace fee is not optional and a margin that ignores it describes a business you do not have.
Why is my margin different from my accountant's?
An accountant's gross margin usually counts only the cost of goods, leaving fees and fulfilment in operating expenses. Both are correct for their purpose; this one is the per-unit decision figure, theirs is the statutory one.
Rates on this page are the published schedules as of 2025-01-15 and are applied by the same code the calculator runs. Marketplaces reprice — confirm against your own seller dashboard before setting a price.