What is Net Margin?

How is Net Margin Calculated?

Net Margin = (Net Profit ÷ Net Sales) × 100

This gives you the percentage of revenue that remains as profit after covering all costs, including operational, fixed, and variable expenses.

Why Net Margin Matters

Net Margin gives you insight into how efficiently your business runs. A higher net margin means you're keeping more profit from every dollar earned-an important sign of long-term financial health.

How to Improve Net Margin

1. Lower Operational Costs
   Focus on reducing operating costs in relation to revenue growth.

2. Cut Inefficiencies
   Identify and eliminate wasteful spending across channels such as:

   • Advertising (e.g. overspending on low-ROI campaigns)

   • Warehouse fulfilment costs

   • Supply chain and vendor inefficiencies

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