Net Profit Margin
Net profit margin is the bottom line, net profit divided by revenue, after every cost: COGS, fees, shipping, advertising, payroll, software and overhead. It's the truest single measure of whether the business works. Established ecommerce brands typically land between 8% and 15%; under 5% usually means a margin leak somewhere upstream, and over 20% usually means a strong brand with organic demand or under-invested growth.
Net margin is where every upstream error surfaces. A seller doing $2 million a year at 8% takes home $160,000. Find three points of leak, unclaimed FBA reimbursements, mispriced shipping, a fee increase nobody noticed, and the same revenue produces $220,000. At typical exit multiples, those three points are also worth several hundred thousand dollars of enterprise value, which is why buyers scrutinize this number hardest.
The practical problem is that most sellers can't see net margin monthly, because their books close late or not at all. By the time the annual tax return reveals the number, the leak has run for a year. A disciplined month-end close puts a real net margin in front of you by day 10 of the following month. That cadence, plus channel-level detail, is the core promise of our monthly bookkeeping, and our published pricing is built around it.
Where this shows up in our work
This isn’t textbook material for us; it’s the day-to-day of keeping seller books right. See how we handle it in practice:
Monthly Ecommerce Bookkeeping→