What Is A Good Profit Margin For A Small Business? (2025)
- A net profit margin of 10% is considered healthy, while anything above 20% is strong.
- For gross profit margin, 50–70% is a solid range for small eCommerce stores.
- 5% = Low but common when you’re just starting
- 10% = Healthy and sustainable
- 20%+ net profit margin = Strong. You’ve got healthy breathing room.
- If your net profit goes up and revenue stays the same → margin goes up.
- If your revenue goes up but net profit stays the same → margin goes down.
- Net Profit: Am I actually keeping enough after all my costs?
- Revenue: Is my top-line growing without dragging my profit down?
- Total Cost (remember include hidden costs + taxes): Are there sneaky costs I haven’t factored in?
- COGS: Did my product or shipping costs go up without me noticing?
- Inventory: Am I sitting on unsold stock that’s tying up my cash?
- All types of costs
- Ad spend from all marketing channels
- Taxes, transaction fees, shipping fees
- App subscriptions and any other hidden fees you almost forgot to put in your sheets
Content Executive at TrueProfit & eCommerce Content Specialist
Leah Tran is a Content Specialist at TrueProfit, where she crafts SEO-driven and data-backed content to help eCommerce merchants understand their true profitability. With a strong background in content writing, research, and editorial content, she focuses on making complex financial and business concepts clear, engaging, and actionable for Shopify merchants.
Leah Tran is a Content Specialist at TrueProfit, where she crafts SEO-driven and data-backed content to help eCommerce merchants understand their true profitability. With a strong background in content writing, research, and editorial content, she focuses on making complex financial and business concepts clear, engaging, and actionable for Shopify merchants.
Table of Contents
