Gross margin calculator
What you keep from revenue after cost of goods.
Formula
Gross margin % = ((revenue − COGS) ÷ revenue) × 100
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Gross margin
42.0%
gross margin
Worked example
$1,000,000 of revenue against $580,000 of cost of goods leaves 42.0% gross margin. Move $30,000 of inbound freight out of operating expense and into that cost line and the same business reports 39.0%, which is why the definition of cost of goods matters more here than the arithmetic.
When you reach for this
The baseline every other margin conversation starts from. Run it per channel before you run it per company, because wholesale and DTC rarely resemble each other.
How to read the number
This figure flatters retail channels when you book deductions below the line. If you record chargebacks as an expense rather than against revenue, your true retail margin is lower than this number suggests.
Metrics that travel with it
Questions operators ask about this metric
What belongs in cost of goods?
Product cost plus everything it took to make the unit sellable: freight in, duties, and inbound handling. Leaving those out is the most common way a reported margin flatters a line review.
Should chargebacks reduce revenue or sit as an expense?
Book them against revenue wherever the accounting allows. Recording them below the line makes retail channels look more profitable than the cash says they are.
Why does margin differ so much by channel?
Because the cost side does. Marketplace fees, wholesale terms, and DTC shipping land in different places on the P&L, so a blended figure hides the channel that is losing money.
Is gross margin the same as markup?
No. Margin divides the spread by retail price; markup divides it by cost. The same dollar spread produces a much larger markup number, and confusing the two is how pricing errors start.
Stop calculating this by hand
Every number on this page comes out of data you already have — orders, shipments, inventory, deductions. Endless keeps those in one source of truth instead of four exports, so the metric updates on its own and agents watch it for you.