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Use our free gross margin calculator to quickly determine your business' profitability. Simply enter your revenue and cost of goods sold (COGS) to see your gross margin percentage instantly.
Gross margin is one of the most important metrics for business owners, accountants, and entrepreneurs. It shows how efficiently you're producing and selling products or services. A higher gross margin means more money available to cover operating expenses, reinvest in growth, or increase profits.
Whether you run an e-commerce store, a service-based business, or a startup, understanding your gross margin helps you make smarter pricing and budgeting decisions. Bookmark this tool for quick financial analysis anytime.
It's a tool that compares revenue to cost of goods sold (COGS) and returns your gross profit and gross margin percentage.
Gross Margin (%) = [(Revenue − COGS) ÷ Revenue] × 100. The calculator runs this automatically.
Gross margin shows how much profit remains after direct costs. A healthy margin supports pricing, reinvestment, and overall business health.
Gross profit is a dollar amount (Revenue − COGS). Gross margin expresses that profit as a percentage of revenue.
No. It focuses on direct costs (COGS). Taxes, rent, admin salaries, and other overhead are excluded.
Yes. Treat direct labor and project costs as cost of goods sold (COGS) to compute service gross margin.
It varies by industry. Retail often sees ~25–35%, SaaS 70–90%, manufacturing 15–25%. Benchmark against peers.
Yes. Enter revenue and cost of goods sold (COGS) for each item to see individual and average margins.
Your cost of goods sold (COGS) exceeds revenue; you're selling at a loss. Revisit pricing, supplier costs, discounts, or product mix.
Raise prices strategically, reduce material or production costs, streamline operations, and focus on higher-margin products or services.