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How this calculator works
Gross profit = revenue − COGS. Gross margin = gross profit ÷ revenue × 100%. Net profit = gross profit − operating expenses. Net margin = net profit ÷ revenue × 100%. Break-even revenue = COGS + operating expenses.
Useful scenarios
- A freelance designer checking whether their project revenue covers both direct and overhead costs.
- A digital product seller benchmarking their margin against industry standards for SaaS or courses.
- A solo business owner modeling what happens to profit margin if they reduce expenses by 20%.
FAQ
What is a good profit margin?
For digital products and SaaS, gross margins of 70%–90% are common. For services (freelancing, consulting), 30%–60% is typical. Net margins above 10%–20% are generally healthy for solo businesses.
What is the difference between gross and net margin?
Gross margin only considers direct costs (COGS). Net margin includes all operating expenses like software, marketing, admin, and overhead. Gross margin tells you if your product is viable; net margin tells you if your business is profitable.
What counts as COGS vs operating expenses?
COGS = costs directly tied to delivering your product (hosting, contractor pay, materials, tools per project). Operating expenses = costs to run the business (monthly SaaS subscriptions, marketing, rent, admin labor).