Marketing Suite

Profitability Calculators

The arithmetic underneath a business that works: what a sale is worth once the variable costs come off, and what that leaves you to spend on winning the next one.

From margin to profit: reading these numbers in order

This category answers the least glamorous question there is: does anything survive at the end? The order to read it in runs upwards. Gross margin comes first, because it decides what a single sale leaves you once the goods are paid for — and because every ceiling further up is derived from it rather than chosen. Order value then sets how much of that margin one transaction actually delivers, and conversion rate sets how many transactions a given amount of traffic produces. Only with those three fixed does a return figure mean anything: the same 2x return is comfortable at a 60 % margin and ruinous at 20 %. A number that looks healthy in a dashboard has usually skipped one of these steps.