Calculate gross, operating, and net profit margins for any business with instant breakdowns of where revenue goes and how to improve profitability.
Practical example: $100K revenue, physical product with standard overhead. For a ecommerce store scenario, enter the values that match your situation to get an instant cost estimate.
What is a good gross profit margin? Good gross margins vary by industry: SaaS/software: 70–85%, Consulting/services: 60–75%, Ecommerce (physical products): 30–50%, Retail: 20–40%, Restaurants: 60–70% (but after labor and overhead, net is only 3–9%), Manufacturing: 25–35%. Compare yourself to industry benchmarks, not absolutes. A 30% margin is excellent for retail but poor for software.
Formula: Gross Margin = (Revenue − COGS) / Revenue × 100
Operating Margin = (Gross Profit − OpEx) / Revenue × 100
Net Margin = (Operating Profit × (1 − Tax Rate)) / Revenue × 100
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