Weighted Average Margin Calculator
Margin weighted by how much each line sells.
Weighted average margin
49.0%
$9,800 on $20,000
The simple average of the three margins is 56.7% — 7.7 points from the real figure, because it ignores how much each product actually sells.
How the Weighted Average Margin Calculator works
A simple average of product margins answers a question nobody asked. Weighting each product by its share of revenue answers the real one: what margin is the business actually earning on the sales it actually makes?
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
How is weighted average margin calculated?
Sum of (each product's margin × its share of total revenue). A product at 60% margin generating 20% of revenue contributes 12 percentage points to the weighted figure.
Why not use a simple average?
Because it treats every product as equally important regardless of sales. A shop with one 80%-margin item selling twice a year and one 20%-margin item selling daily has a simple average of 50% and a real margin near 20%.
Should I weight by revenue or by units?
Revenue, in almost every case. Unit weighting treats a £5 sale as equal to a £500 sale, which distorts the picture whenever prices vary — which is nearly always.
How often should I recalculate it?
Whenever the mix shifts meaningfully — after a sale period, a new product launch, or a seasonal swing. Mix changes move the weighted margin without any individual product margin changing at all.