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How do you calculate gross margin without cost?

Asked 2 years ago

The gross margin formula seems to require the use of the profit value, and in order to get this value, costs need to be subtracted from revenue. Is it still possible to calculate the gross margin percentage if I do not have the value of the cost of goods sold? Perhaps there is an alternative formula where the cost of goods sold can be substituted for a different value?

Jolina Regin

Friday, October 15, 2021

The gross margin formula is the (total revenue-cost of goods sold) / total revenue * 100. Yes, you will need the cost of goods sold (COGS) to get the gross profit margin calculated. It is hard to calculate COGS for e-commerce businesses but, you can use inventory software that integrates into e-commerce stores and accounting systems.

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