E-commerce Glossary

Product Margin

Difference between the selling price and the cost price (COGS) of a product, expressed as a percentage.

Product margin is the gross margin calculated at the individual product level. It determines which products are profitable to sell and which ones drag down your overall profitability.

Calculation: Product Margin = (Selling Price excl. tax - COGS) / Selling Price excl. tax x 100.

A product-level analysis often reveals surprises: best-sellers are not always the most profitable. A best-seller at 15% margin generates less profit than a niche product at 60% margin.

Fullmetrix imports product costs from your CMS and calculates margin by product, by category, and by period. You can identify at a glance which products to promote and which to optimize.

Related terms

AOV (Average Order Value)Average amount spent per order in your store.See definition ARPU (Average Revenue Per User)Average revenue generated per user over a given period.See definition Blended CACAverage acquisition cost including all marketing channels.See definition Blended ROASOverall return on all advertising spend combined.See definition CAC (Customer Acquisition Cost)Total cost to acquire a new customer.See definition Churn RatePercentage of customers lost over a given period.See definition
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