Margin checkpoint

Growth Margin

Channel margin minus advertising, plus reimbursements: what the business earns after paying for the channel and paying for growth.

Formula

\begin{array}{l} \textcolor{#FF8C5E}{\text{Growth Margin}} \\ \quad = \text{Channel Margin} \\ \quad {} - \text{Advertising} \\ \quad {} + \text{Reimbursements} \end{array}

Growth Margin = Channel Margin − Advertising + Reimbursements

\begin{array}{l} \textcolor{#FF8C5E}{\text{Growth Margin \%}} \\ \quad = \dfrac{\text{Growth Margin}}{\text{Net Revenue}} \times 100 \end{array}

Growth Margin % = Growth Margin ÷ Net Revenue × 100

Advertising is the cost of growth. Measuring it here, against the full net revenue base, is what turns TACoS into points of margin: the gap between channel margin and growth margin is what growth cost you.

Reimbursements are added back at this stage because they are cash Amazon returns to you outside the order flow.

Growth margin is the last checkpoint before your own overheads. It is the best single number for comparing products, because it includes every Amazon-side cost and excludes costs you allocate by rule.

Where it sits in the waterfall

See the whole waterfall worked through.

Our guide walks all eight steps with real numbers: How to calculate Amazon net margin.

Book a demo

Growth Margin

Formula

Where it sits in the waterfall

Related terms