What's a healthy gross margin for e-commerce & dtc?
Short answer
For e-commerce & dtc, a healthy gross margin is around 40–60%. Below the low end and you're subsidising the customer; above the high end and you're likely mispricing.
Real peer data
Community median publishes once we have 5+ anonymous submissions from e-commerce & dtc. Currently at 0. Run your numbers below to help build it — your ratios are shared, your business name and dollar amounts are not.
Formula
Gross Margin (%) = (Revenue − COGS) / Revenue × 100
Take your revenue, subtract the direct cost of what you sold (COGS), divide by revenue, multiply by 100.
Why gross margin matters for e-commerce & dtc
Gross margin is the ceiling on every other margin. If you can't make money on the unit, scaling won't fix it — you'll just lose money faster. Lenders and acquirers use it to gauge pricing power and operational efficiency.
Gross margin is where cost of goods, pricing, and operating leverage meet. For e-commerce & dtc, small changes here compound — a 2-point improvement typically doubles owner take-home over a year.
Gross Margin across other industries
People also ask
Common questions about gross margin for e-commerce & dtc
What is a good gross margin for e-commerce & dtc?+
For e-commerce & dtc, a healthy gross margin is around 40–60%. The exact number depends on scale, region, and business model, but this is the range most banks, acquirers, and industry consultants treat as "healthy."
How is Gross Margin calculated?+
Take your revenue, subtract the direct cost of what you sold (COGS), divide by revenue, multiply by 100.
Why does gross margin matter more for e-commerce & dtc?+
Below this range, you're typically not generating enough profit per dollar of revenue to reinvest in growth, pay owners fairly, or weather a bad quarter.
What's the fastest way to improve my gross margin?+
Run your numbers through CFO Grade — the free memo pinpoints the two or three levers that move gross margin fastest for a business your size, in your industry. Common fixes for e-commerce & dtc include pricing reviews, menu / SKU rationalization, and cutting the bottom 15% of unprofitable products or customers..
See your gross margin — graded against e-commerce & dtc peers.
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Every metric that matters for e-commerce & dtc — margins, coverage, efficiency — with plain-English explanations.