Free tool
Ecommerce Profit Margin Calculator
Work out gross margin, net margin, profit per unit, and break-even ROAS on any ecommerce product in seconds, then see whether your pricing leaves room to advertise profitably.
Product details
Results
Gross Margin
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Net Margin
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Profit per Unit
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Break-even ROAS
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Frequently Asked Questions
What is a good profit margin for ecommerce?
A good ecommerce profit margin varies by industry, but most healthy ecommerce businesses target a net margin of 10-20%. Gross margins above 50% are considered strong, while margins between 30-50% are average. Below 30% often signals pricing or cost issues.
What is the difference between gross margin and net margin?
Gross margin only accounts for the cost of the product itself (cost of goods sold), calculated as (Selling Price - Cost Price) / Selling Price. Net margin factors in all additional costs like shipping and advertising, giving you the true profit picture after all expenses.
What is break-even ROAS and why does it matter?
Break-even ROAS (Return on Ad Spend) tells you the minimum return you need from your ad spend to avoid losing money. It is calculated as Selling Price / Ad Spend per unit. If your break-even ROAS is 4x, you need at least $4 in revenue for every $1 spent on ads to break even.
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