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Shopify profit margin calculator

Profit margin is a financial metric that measures the profitability of a business or a specific product or service by determining the percentage of profit earned from each unit of revenue generated and is a good indicator of your Shopify store’s health. To learn more about how much your Shopify store is worth, check out this blog post.


Gross margin definition: Percentage of revenue that exceeds the cost of goods sold. It measures the profitability of a company’s products or services before accounting for other operating expenses, such as marketing, administration, and research and development.

Net sales definition: Total revenue a company generates from the sale of its products or services after taking into account any deductions, such as sales discounts, returns, and allowances.

Cost of goods (COGS) definition: Direct costs incurred in producing or acquiring the goods or services sold by a company. COGS includes all the costs associated with the production or acquisition of a product, such as raw materials, labor, and overhead expenses.

How to calculate gross margin: (Net sales - COGS) / (Net sales) × 100

Ways to improve my store’s gross margin: Check out our blog posts on best practices for reaching profitability.

Explore other shopify profit margin calculators

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