Gross Margin vs Net Margin
Essential Amazon seller metric for profitability
Gross Margin is revenue minus Cost of Goods Sold, divided by revenue. Net Margin subtracts every direct cost: Amazon referral fees, FBA fulfillment, storage, ad spend, refunds, and promotional discounts. The 15-30 point gap between them is where most FBA sellers discover their P&L is not what Seller Central shows.
Data Source
Nova Analytics (calculated)
Update Frequency
Daily
Measurement Units
Percent
Available at: Account, ASIN, SKU
Gross Margin = (Revenue - COGS) / Revenue × 100 | Net Margin = (Revenue - COGS - Amazon Fees - Ad Spend - Refunds) / Revenue × 100Revenue $100. COGS $40. Gross Margin = 60%. Now subtract 15% referral fee ($15), $6 FBA fulfillment, $1 storage, $10 ad spend, $2 refunds: Net Margin = (100 - 40 - 15 - 6 - 1 - 10 - 2) / 100 = 26%. A 34-point gap between gross and net is typical for private-label FBA.
| Tier | Range / Signal |
|---|---|
| Good | 20-25 point gap — lean fees, low ad dependence |
| Average | 25-35 point gap — most private-label FBA setups |
| Watch out | 35+ point gap — fees and ads are compressing profit |
Gross Margin vs Net Margin is measured in Percent and reported through Nova Analytics (calculated). Data is typically updated daily.
Note:
For most FBA sellers, Net Margin runs 15-30 points below Gross Margin.
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Compare Gross Margin vs Net Margin with
Benchmarks in profitability
Related KPIs
Manufacturer's suggested retail price.
Current selling price on Amazon.
(List Price - Selling Price) / List Price * 100.
% change in demand / % change in price.
Your price vs. average competitor price.
Number of price changes in a period.
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