Revenue and margins explained

Plain definitions of the money words you see across Easy Profit Calculator: revenue, gross margin, contribution margin, net margin and AOV.

Updated June 30, 2026

These are the money words you will see again and again in the app. The app always uses these exact definitions, so the numbers line up everywhere.

Revenue

Your net sales after discounts and after refunded amounts, for the orders in the period you are viewing. It is not gross sales, and it is not the total a customer paid at checkout.

Gross margin

Revenue minus product cost, divided by revenue, shown as a percent. It only looks at the markup on the goods. It ignores shipping, payment fees, ads and fixed costs.

Contribution margin

Order-level net profit divided by revenue, before fixed costs. It is the share of each extra sale that is left to help cover your fixed costs and profit.

Net margin

Net profit after everything, divided by revenue, as a percent. This is the truest measure of how much of each sale you actually keep.

Average order value (AOV)

Revenue divided by the number of orders in the period. Raising AOV is one of the most reliable ways to lift profit, because many of your costs do not rise at the same rate.

Frequently asked questions

Is margin the same as profit?

No. Margin is a percentage of revenue, while profit is the money left over in cash. A store with high revenue can still have low profit if its margins are thin.