What Is Profit Margin? What Is a Healthy Margin?

October 25, 2025 · KârHesapla · Ferhat Demir · E-commerce Specialist

Profit margin is the ratio of net profit to the selling price: Margin = Net Profit / Selling Price × 100. It should not be confused with “markup”, which is measured against cost — a 50% markup means a margin of about 33%.

Margin bands in e-commerce

• 0–5%: Red zone. Returns and campaigns can easily push you into a loss.
• 5–15%: Sustainable but sensitive. Monitor cost items closely.
• 15–30%: Healthy zone. There is room for advertising and growth investment.
• 30%+: Strong margin; be prepared for competitors to cut prices.

There are two ways to raise your margin: increase the price or lower the cost. The Margin Analysis tool shows the price needed for a target margin with a scenario table.