Calculating your profit margin is straightforward. Take your total revenue from a sale, subtract the direct cost of the product, divide that result by the revenue, and finally, multiply by 100 to get a percentage.

If you want to know your profit margin, the basic formula is straightforward: Margin % = (Selling Price - Cost of Goods Sold) / Selling Price × 100%. This number shows you the percentage of revenue you actually keep as profit from each sale. Getting this right is essential for understanding if your business is truly profitable.

For any e-commerce business, your net sales margin is the single most honest number you can look at. It tells you, in simple terms, how much actual profit you pocket from every dollar of sales after every single cost—from the product itself to marketing, salaries, and pesky platform fees—has been paid.