E-commerce has existed for about twenty years. During that time, the focus was simple: growth. More revenue, more products, more markets. But every industry follows an S-curve, and e-commerce has now entered a phase of maturity. Growth alone is no longer enough. This was recognised by many e-commerce entrepreneurs we spoke to during our interview rounds at the Webwinkel Vakdagen 2026. The question that kept coming up: what do I actually keep?
The answer to that question is gross margin.
What is gross margin?
Gross margin is your revenue minus all direct costs. It is the amount that remains after you have paid for everything directly related to the sale: purchasing, shipping, platform costs and advertising.
Say you sell a product for €100. A simple margin calculation looks like this:
| Item | Amount |
|---|---|
| Selling price | €100 |
| VAT | €20 |
| Cost of goods sold | €30 |
| Shipping costs | €10 |
| Platform fee | €10 |
| Advertising costs | €10 |
| Gross margin | €20 |
Your gross margin in this case is €20, or 20% of the selling price. That is the amount you use to cover overhead, invest and make a profit. The higher the margin, the healthier your business.
Two ways to improve your margin
You can increase your gross margin in two ways: by charging more for your product, or by reducing your direct costs. Those two options may sound equivalent, but they are not.
Option 1: Increase selling price by €5
If you raise your selling price from €100 to €105, your margin does not increase by a full €5. You have to remit more VAT, and your platform fee rises with it because it is calculated as a percentage of the selling price.
| Item | Amount |
|---|---|
| Selling price | €105 |
| VAT | €21 |
| Cost of goods sold | €30 |
| Shipping costs | €10 |
| Platform fee | €10.50 |
| Advertising costs | €10 |
| Gross margin | €23.50 |
Your margin increases from €20 to €23.50. That is a rise of 17.5%. Of that extra €5 in selling price, only €3.50 ends up as additional margin.
Option 2: Reduce direct costs by €5
If you reduce your direct costs by €5 in total, for example by saving €2 on purchasing, €1 on shipping, €1 on your platform fee and €1 on advertising costs, every euro goes straight to the bottom line.
| Item | Amount |
|---|---|
| Selling price | €100 |
| VAT | €20 |
| Cost of goods sold | €28 |
| Shipping costs | €9 |
| Platform fee | €9 |
| Advertising costs | €9 |
| Gross margin | €25 |
Your margin increases from €20 to €25. That is a rise of 25%. Every euro saved comes in full, with no leakage.
The difference at a glance
| Scenario | Selling price | Margin in € | Margin % | Margin increase in € | Margin increase % |
|---|---|---|---|---|---|
| Base | €100 | €20.00 | 20.0% | — | — |
| Price +€5 | €105 | €23.50 | 22.4% | +€3.50 | +17.5% |
| Costs -€5 | €100 | €25.00 | 25.0% | +€5.00 | +25.0% |
The difference is striking. The same effort, expressed as €5, delivers a 25% margin increase through cost optimisation versus 17.5% through a price increase. That is a significant difference, especially when you multiply it across thousands of orders per year.
Cost optimisation is in most cases more effective than raising prices. That does not mean price increases are unimportant, far from it. But a saving in your direct costs carries no VAT leakage, no rising platform fee and no other loss along the way.
Where is there room in your direct costs?
Most e-commerce businesses have more control over their costs than they realise. A few areas where margin can be gained:
- Purchase price: better rates with suppliers, larger order volumes or alternative sources
- Shipping costs: compare carriers, negotiate as volume grows, reconsider packaging dimensions
- Returns: fewer returns through better product pages and sizing information
- Advertising costs: monitor your ROAS closely, stop campaigns that eat into margin
- Platform fees: understand how your fee is structured and whether categorisation has an impact
In closing
Margin is not an accounting afterthought. It is the foundation of a healthy e-commerce business. Especially now that the industry is maturing and growth alone is no longer enough, understanding your gross margin is becoming increasingly important.
Know what you sell, know what it costs, and know what remains. That is where profitable e-commerce begins.
