Can I use the margin calculator for a whole month's sales instead of one product?

The example

Your store sold 70000 before tax in a month, and the goods that went out in those orders cost 42000. In the Profit margin calculator:

In another month with the same sales but heavy discounting and pricier stock, the cost was 51000. The result: gross profit 19000 and a margin of 27.14%. Sales did not move, but you kept a much smaller share of them. A sales dashboard on its own never shows you that.

Cost of goods sold, not the month's purchases

The most common mistake here is entering what you paid suppliers during the month instead of the cost of what you actually sold. Buy a lot of stock ahead of a season and this month's margin looks awful, then next month's looks brilliant, and the truth is in between. The right figure is the cost of the units that went out in this month's orders. Many store platforms show it in their reports if you record a cost for each product; otherwise work it out from units sold times the cost per unit.

Do not average your product margins

With two products, one at a 60% margin and one at 20%, you might assume the store runs at 40%. That only holds if they sell in equal amounts. Gross margin depends on how much of each you sell:

So add up the costs, add up the sales, then enter the two totals. Never add up percentages.

What this figure leaves out

• Operating expenses: rent, subscriptions, salaries, general advertising. Log them in the Expense summary generator and subtract the total from gross profit to see what is really left.
• Shipping and payment fees, unless you added them to cost of goods sold. Pick one method and keep to it every month so the comparison is fair.
• VAT: enter sales before it.

To find the sales volume that covers your fixed costs at this margin, use the Break-even calculator.