Margin checkpoint
Net Operating Profit
Growth margin minus allocated overheads: the money the business actually made. Divided by net revenue, this is net margin.
Formula
Overheads are your own operating costs: salaries, software, agency retainers, 3PL and prep. They are allocated to the channel and to products by a consistent rule, most often by share of net revenue or share of units sold.
Net operating profit is the bottom of the management P&L. It is deliberately non-GAAP and built on order dates, because its job is to support decisions rather than audits. Clarisix also offers shipment (GAAP) and payout (cash) bases on a toggle for the finance team.
Rules of thumb for Amazon brands: a net margin above 15 percent is commonly treated as healthy, above 20 percent as strong, and below 10 percent as fragile.
Where it sits in the waterfall
- 1Gross Ordered Revenue
- 2Gross Shipped Revenue
- 3Net Product Revenue
- 4Net Revenuecheckpoint
- 5Product Margincheckpoint
- 6Channel Margincheckpoint
- 7Growth Margincheckpoint
- 8Net Operating Profitcheckpoint
Related terms
See the whole waterfall worked through.
Our guide walks all eight steps with real numbers: How to calculate Amazon net margin.
Book a demo