/ /Net Profit Margin Calculator
Net Profit Margin Calculator
Measure what you truly keep: net profit margin after COGS, operating expenses, fees, and taxes. Breaks gross, operating, and net margins into one clear waterfall.
Profit Inputs
Total Revenue ($)
COGS ($)
Operating Expenses ($) Marketing, fees, shipping, software, labor
Interest + Taxes ($)
Margin Waterfall
Total Revenue$80000.00
Gross Profit (60.0%)$48000.00
Operating Profit (30.0%)$24000.00
Net Profit$20000.00
Net Profit Margin25.0%
Bottom-line verdict: You keep $20000.00 of every $80000.00 sold — a 25.0% net margin. Excellent: room to reinvest in growth.
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Frequently Asked Questions
How is net profit margin calculated?
Net Profit Margin = (Revenue - COGS - Operating Expenses - Interest - Taxes) / Revenue x 100. It is the only margin that reflects every cost, so it is the standard measure of overall business health.
What is a good net profit margin for ecommerce?
Aim for 10-20% net margin: 5-10% is survivable at scale, 10-15% is healthy for most stores, and 20%+ is excellent. Niche, digital, and private-label brands skew higher; electronics and grocery skew lower.
Why can gross margin be high but net margin low?
Because operating costs — ads, marketplace fees, shipping, software, labor, returns — eat the gross profit. A 60% gross margin store can still lose money with 25% ad spend plus 15% marketplace fees.
How can I improve net profit margin?
Raise AOV with bundles and thresholds, cut CAC with retention and email, renegotiate COGS and 3PL rates, trim app sprawl, reduce return rates, and shift mix toward lower-fee channels.
Should taxes be included in net margin?
Yes for true net margin (net income / revenue). For operating decisions, many sellers track pre-tax net margin separately so tax timing does not hide operating trends.