Product Margin %: Profitability as Percentage of Revenue

The percentage of revenue remaining after subtracting the cost of goods sold.

Formula

Product Margin % = ( Gross Revenue − COGS ) ÷ Gross Revenue × 100

Formula Components

Metric	Definition
Gross Revenue	Total revenue from product sales before discounts and adjustments
COGS	Cost of goods sold from Shopify product inventory data

Metadata
Type	Percentage
Data Source	Shopify
Aggregation	Weighted Average

Example

Your store generated $50,000 in revenue with $30,000 in product costs, resulting in a 40% product margin:

Category	Revenue	COGS	Margin %
Apparel	$25,000	$12,500	50%
Accessories	$15,000	$10,500	30%
Home Goods	$10,000	$7,000	30%
Total	$50,000	$30,000	40%

How It Works

Product Margin % calculates the percentage of each revenue dollar that remains after covering product costs. Shopify provides product cost data through inventory settings or metafields. This metric aggregates across all line items in orders, weighted by revenue contribution.

When to Use

Scenario	Action
Evaluating product profitability	Identify high-margin products to promote
Pricing decisions	Adjust prices on low-margin items
Supplier negotiations	Flag products with eroding margins
Ad spend allocation	Focus budget on products with healthy margins

Metric	Relationship
Gross Revenue	Revenue before deductions (denominator)
COGS	Product costs subtracted from revenue
Product Margin	Dollar amount instead of percentage
Net Revenue	Revenue after discounts and refunds

See all Product Margin metrics →

Product Margin Product Margin/Order

⌘I

​Formula

​Formula Components

​Example

​How It Works

​When to Use

​Related Metrics

Formula

Formula Components

Example

How It Works

When to Use

Related Metrics