Margin checkpoint

Product Margin

Net revenue minus cost of goods sold: what the product earns before any selling cost.

Formula

Cost of goods is the landed cost of the units sold: manufacturing or purchase price, freight, duty and prep. Amazon has no visibility of this number, which is the main reason no Amazon report can show true profitability.

Product margin is the first margin checkpoint after net revenue. If it is weak, nothing downstream can rescue the product: fees, advertising and overheads only take more away.

In the Clarisix margin cascade this is the first of four stages, each carrying its own percentage and its own period-over-period move.

Where it sits in the waterfall

  1. 1Gross Ordered Revenue
  2. 2Gross Shipped Revenue
  3. 3Net Product Revenue
  4. 4Net Revenuecheckpoint
  5. 5Product Margincheckpoint
  6. 6Channel Margincheckpoint
  7. 7Growth Margincheckpoint
  8. 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.

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