How this calculator works
Gross margin measures how much revenue remains after direct production or product costs. It is useful for ecommerce, retail, manufacturing, agencies, and product businesses.
Gross profit = revenue − COGS
Gross margin = gross profit ÷ revenue
Gross margin = gross profit ÷ revenue
Gross margin does not include overhead, payroll, rent, software, advertising, or taxes unless those costs are part of COGS.
How to use this calculator
- Enter realistic values that match your current situation.
- Press Calculate to refresh the estimate.
- Compare the main result with the supporting details in the result panel.
- Change one input at a time to see which variable affects the result most.
Planning note: Gross Margin Calculator gives an educational estimate. It does not include every tax rule, fee, platform policy, market condition, or personal constraint, so use it as a quick planning reference rather than a final decision.
FAQ
What is gross margin?
Gross margin is the percentage of revenue left after cost of goods sold.
What is a good gross margin?
It depends on industry, but higher margins generally give more room for overhead and profit.
Is gross margin the same as net margin?
No. Net margin includes all expenses, while gross margin only uses COGS.
Why is COGS important?
COGS shows the direct cost of delivering your product or service.
Can gross margin be negative?
Yes, if COGS is greater than revenue.