---
title: "Averaging margin percentages instead of dollars"
description: "A blended margin that averages each option's percentage by its share of orders is wrong. Margin has to be weighted by revenue: sum the dollars, divide once."
url: https://offersuite.io/articles/averaging-margin-percentages
updated: 2026-10-13
---

# Averaging margin percentages instead of dollars

A blended margin that averages each option's percentage by its share of orders is wrong. Margin has to be weighted by revenue: sum the dollars, divide once.

Spreadsheet mistake 2 of 9

## The mistake

Each option has a margin percentage. The sheet's blended margin is the average of those percentages, weighted by each option's share of orders. It looks like the right weighting and it isn't. A percentage is a share of that option's revenue, so it has to be weighted by revenue. An option with a large order value brings in more dollars per order than its share of orders says.

The correct figure never averages a percentage. Add up the margin dollars, add up the revenue dollars, and divide once.

## A worked example

A bottle of supplements at $37.95 with quantity breaks for two, three and four bottles, $9.29 of shipping charged on every order, and 1,000 orders split 450, 300, 150, 100 across the four options. The options' margins run from 42.9% on one bottle to 50.6% on three.

Weighted by orders, the sheet's blended margin is 47.0%. In dollars, the 1,000 orders bring in $76,279.50 and keep $36,837.00, which is 48.3%.

The single bottle is 45.0% of the orders and only 27.9% of the revenue. Weighting by orders gives its lower margin more say than its dollars have.

The same 1,000 orders, in dollars and in percentages

| Option | Orders | Revenue | Margin | Margin % |
| --- | --- | --- | --- | --- |
| 1 unit | 450 | $21,258.00 | $9,112.50 | 42.9% |
| 2 units, 5% off each | 300 | $24,423.00 | $12,231.00 | 50.1% |
| 3 units, 10% off each | 150 | $16,765.50 | $8,485.50 | 50.6% |
| 4 units, 15% off each | 100 | $13,833.00 | $7,008.00 | 50.7% |
| Average of the percentages, by orders |  |  |  | 47.0% |
| All orders, dollars summed | 1,000 | $76,279.50 | $36,837.00 | 48.3% |

The order's figures are computed by the margin engine in Offer Suite's own code, in whole cents. The sheet's are the same order with the mistake applied.

## What it does to the decision

Break-even return on ad spend is 1 ÷ margin. The sheet's 47.0% asks for 2.13× of revenue per ad dollar, and the offer breaks even at 2.07×. The gap looks small. It applies to every dollar of spend, and here it turns down traffic that pays.

The gap grows with the spread in order values. Here the largest order is about three times the smallest. Put a subscription's small first order or a six-pack into the same blend and the two figures move further apart. When the large orders carry the better margins, as here, the sheet reads low. When they carry the thinner ones it reads high, and the offer looks safer than it is.

## What prevents it

Offer Suite's margin engine counts in whole cents and never feeds a percentage into another figure. A margin rate exists only as margin cents divided by revenue cents, computed at the level being reported: one order, one option or the whole offer.

The same holds after launch. [Realized profit](https://offersuite.io/features/profit) per option is the sum of each order's contribution in cents, and the offer's margin is those sums over the summed revenue. The [option calculator](https://offersuite.io/calculators/offer-option-profit-per-visitor) compares options in dollars per visitor for the same reason.

A spreadsheet is still the right tool for some of this. Where it is, and where it stops: [Offer Suite vs a spreadsheet](https://offersuite.io/compare/spreadsheets).

## Where the numbers come from

The example is not a real brand's offer. The split of orders across the four options is made up. Every other input is sourced below, or marked there as an assumption.

|  |  |
| --- | --- |
| Price | $37.95, a bottle of supplements. [Nature's Sunshine homepage, read 23 September 2026](https://www.naturessunshine.com/) |
| Unit cost | $10.47. [Nature's Sunshine, fourth quarter and full year 2025 results, read 23 September 2026](https://ir.naturessunshine.com/news-events/press-releases/detail/267/natures-sunshine-reports-strong-fourth-quarter-and-full) |
| Refund reserve | 5%, Offer Suite's default assumption for consumables. NRF's all-category figure for online sales is 19.3%, but consumables are rarely returned; use your own rate. |
| Pick and pack | $3.20 per order and $0.48 for each extra item. [Fulfill.com, 3PL pricing benchmarks (The Fulfillment Advisor 2025 survey of 600+ warehouses), read 23 September 2026](https://www.fulfill.com/3pl-pricing) |
| Shipping label | USPS Ground Advantage, commercial, Zone 5, by weight rounded up to the pound: 1 lb $9.29 · 2 lb $10.50 · 3 lb $12.12 · 4 lb $13.89 · 5 lb $14.53. Packed weight is an assumption: 0.5 lb per unit. [USPS Notice 123, USPS Ground Advantage Commercial, Zone 5 (effective 4 October 2026), read 13 October 2026](https://pe.usps.com/text/dmm300/Notice123.htm) |
| Card fees | 2.9% + $0.30 per order: Shopify Payments' online rate for a standard card on the Basic plan in the United States. Higher plans pay a lower rate, and premium cards a higher one. [Shopify's pricing page for the United States, online standard card rates, read 12 October 2026](https://www.shopify.com/pricing) [Rates by plan and country](https://offersuite.io/fees/shopify-payments/united-states) |

## Related

- [Articles **Spreadsheet mistakes that misprice offers** Nine mistakes that turn up in offer spreadsheets, each worked on a sourced order: what the sheet shows, what the order earns, and what prevents the error.](https://offersuite.io/articles)
- [Calculator **Offer option calculator: profit per visitor** Compare up to three offer options on profit per visitor, margin per order times conversion, and see the conversion lift each one needs to match the best.](https://offersuite.io/calculators/offer-option-profit-per-visitor)
- [Calculator **Bundle pricing calculator: shipping, subscriptions** Price a bundle against a single unit, one-time and subscribed, with the shipping and pick costs it saves, and the conversion it can lose and still earn as much.](https://offersuite.io/calculators/bundle-pricing)
- [Comparison **Offer profit in a spreadsheet vs Offer Suite** Where a spreadsheet is the right tool for offer profit, and where it breaks: costs that change, renewals, refunds, and a price that has to match checkout.](https://offersuite.io/compare/spreadsheets)
- [Article **Refunds counted twice in an offer's margin** A refund reserve taken off revenue and then summed again inside total cost understates margin by the whole reserve. The worst hit are high-return categories.](https://offersuite.io/articles/refunds-counted-twice)
- [Feature **Forecast and realized profit per offer option** Forecast and realized profit per offer, option, version, item and traffic source from one margin engine in whole cents, with ad spend, realized CAC and subscription LTV.](https://offersuite.io/features/profit)