Gross Margin Calculator
Gross margin in currency and percentage.
Gross margin
56.0%
$28,000 gross profit
Across a catalogue, divide total profit by total revenue. Averaging individual product margins weights a small item the same as a large one.
How the Gross Margin Calculator works
Gross margin gets used to mean both the money left after cost of goods and the percentage that money represents. Both are useful and they answer different questions — the amount tells you what the sale earned, the percentage tells you whether the pricing works.
Not financial advice. Marketplace fees change, and they vary by country, plan and seller status. Every rate here is an editable default, not a quoted price — check the platform's current fee schedule before you price a product against it. This is not tax or business advice.
Frequently asked questions
Is gross margin the same as gross profit?
Loosely used as synonyms, but strictly gross profit is the currency amount and gross margin is that amount as a percentage of revenue. A £30 gross profit on a £50 sale is a 60% gross margin.
How do I calculate gross margin across many products?
Total revenue minus total cost of goods, divided by total revenue. Do not average the individual product margins — that weights a £5 item the same as a £500 one and gives a figure that describes nothing.
Should marketplace fees be in cost of goods?
Strictly they are selling costs rather than cost of goods, so they sit below the gross margin line in formal accounting. Many sellers include them anyway to get a realistic per-sale figure. Either is defensible provided you stay consistent.
What gross margin do I need to be viable?
Enough to cover operating costs at your realistic volume, with room left over. Work backwards: if fixed costs are £5,000 a month and you can sell £20,000, you need a gross margin above 25% before you have earned anything.