Profit Margin Calculator

What do I keep from each order?

Most brands overestimate their margins. See what's actually left after product costs (COGS), shipping, fees, and ads.

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Your costs per order

$
Product Price. The price customers pay for your product. Track: Price vs. competitors.
$
Cost of Goods Sold. Direct costs to produce/acquire products — materials, manufacturing, shipping to warehouse. Healthy gross margin: 50%+.
$
Shipping & Fulfillment. All shipping, fulfillment, and logistics costs. Target: < 10% of AOV.
%
Transaction Fee. Payment processing fees. Typical range: 2.5-3.5%.
$
Marketing Cost per Sale. Average advertising cost to acquire each sale. Healthy CAC: $30-$80 for D2C.
$
Operating Expenses. Overhead costs: rent, salaries, software, marketing, shipping to customers. Target: < 30% of revenue.
How to use this calculator

Example numbers · Net Profit Per Sale

$27.10Strong

Edit inputs

Profit performance

Net Profit Per Sale

Verdict

Strong

$27.10

Estimated profit after the product costs, shipping, fees, marketing and overhead entered.

What we’d check next

We’d compare this profit per sale with monthly fixed costs to see how many sales cover the month. Find the monthly break-even →

View chart and context

Cost breakdown

Per $1 of revenue
COGS$30.0030.0%
Shipping$5.005.0%
Transaction Fee$2.902.9%
Marketing$25.0025.0%
Overhead$10.0010.0%
Net Profit$27.1027.1%
PROFIT BREAKDOWN

Your results

Gross Margin

62.1%

After COGS, shipping & fees

Markup

233.3%

Above cost

Break-Even Price

$72

Minimum price to avoid loss

Gross Profit

$62

After COGS, shipping & transaction fees
BENCHMARK

How you stack up

Directional ecommerce planning benchmark; compare against your own category data. Benchmarks are directional, not a guarantee; use them as a comparison point alongside your own historical data.

You vs. the planning band

Your Net Margin

27.1%

Planning band

A chosen anchor, not measured

Unlock below to see how you compare.

NegativeThinHealthyStrong

SEE HOW YOU COMPARE

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How we calculate your true profit margins on each sale.

Gross Profit
Price − COGS − Shipping − Transaction Fee

Example: $100 − $30 − $5 − $2.90 = $62.10

Net Profit
Price − All Costs (COGS + Shipping + Fees + Marketing + Overhead)

Example: $100 − ($30 + $5 + $2.90 + $25 + $10) = $27.10

Gross Margin %
(Gross Profit ÷ Price) × 100

Example: ($62.10 ÷ $100) × 100 = 62.1%

Net Margin %
(Net Profit ÷ Price) × 100

Example: ($27.10 ÷ $100) × 100 = 27.1%

Markup %
((Price − COGS) ÷ COGS) × 100

Example: (($100 − $30) ÷ $30) × 100 = 233%

Break-Even Price
(COGS + Shipping + Marketing + Overhead) ÷ (1 − Fee %)

Example: ($30 + $5 + $25 + $10) ÷ (1 − 0.029) = $72.09

Markup → margin
Margin % = Markup % ÷ (100 + Markup %) × 100

Example: 233% markup ÷ 333 × 100 = 70% margin on price (before shipping and fees)

More things we’d check

At 27.1% net margin, we’d check which entered cost takes the largest share of each sale.

We’d check discounted orders and returned orders separately from full-price sales.

We’d compare the per-order margin with monthly fixed costs.

Find the monthly break-even

About profit margin

What is profit margin?

Profit margin is the share of each sale you actually keep. Net margin, the number this calculator grades, is what is left after everything: product costs, shipping, payment fees, marketing and overhead. It is the honest answer to "am I making money on this order?"

Formula

Net margin = (price − all costs per order) ÷ price × 100

Gross margin stops earlier: price minus product costs (COGS), shipping and payment fees, before marketing and overhead.

A worked example

  1. You sell a product for $100. It costs $30 to make and $5 to ship, and the payment fee is 2.9% ($2.90).
  2. That leaves $62.10, a 62.1% gross margin.
  3. Take off $25 of marketing and $10 of overhead per order and you keep $27.10.
  4. $27.10 ÷ $100 = 27.1% net margin, which lands in Strong on the ladder.

What’s a good profit margin?

It depends on what you sell and how much you spend to sell it, so compare against your own last few months first. A falling margin is an early warning even while sales grow. For net margin, this is the ladder our calculators grade against:

Below 0%
Negative.
0–15%
Thin.
15–25%
Healthy.
25%+
Strong.

A thin net margin with a healthy gross margin usually points at marketing or overhead, not your pricing.

Gross margin vs net margin vs contribution margin

  • Gross margin is what is left after the cost of making and delivering the product. It sets your break-even ROAS (return on ad spend).
  • Contribution margin also takes off ad spend and returns per order: what each order leaves to cover your fixed costs. Work out profit per order with the contribution margin calculator
  • Net margin takes off everything, overhead included. It is the one your accountant reports.
  • Markup is profit over cost, not over price, so it always reads higher: 233% here.
FAQ

Frequently asked questions

Common questions about profit margins and pricing

A useful target needs to cover the costs and cash demands of your business. This calculator estimates margin after the costs entered; omitted expenses remain omitted. Its bands are reference labels. We’d check a typical month and a lower-sales scenario before setting a target. Reference bands used on this page: Below 0% is negative, 0–15% is thin, 15–25% is healthy and 25%+ is strong. These are calculator labels, not measured industry averages.

They describe the same sale from two directions. Markup is measured against what the product cost you; margin is measured against what the customer paid. A $30 product sold for $100 is a 233% markup and a 70% margin on price — same $70, two very different-looking numbers. One thing to know on this calculator: its Gross Margin also takes out shipping and the transaction fee, so with $5 shipping and a 2.9% fee you’ll see a 62.1% gross margin beside that 233% markup. Those two figures are not measuring the same dollars. Margin is the one to run the business on, because it tells you what share of each sale you actually keep.

Divide your total monthly marketing spend by the number of orders that month. For example, $5,000 ad spend ÷ 200 orders = $25 marketing cost per sale.

Our calculators use industry-standard formulas and are designed for directional accuracy. Results depend on the quality of your input data. For precise financial planning, we recommend validating results with your accountant or financial team.

Yes, completely free with no hidden costs. We offer these tools to help ecommerce brands succeed. We may occasionally share relevant insights via email if you opt in, but the tools remain free forever.

Your calculations run in your browser, and we don't store the numbers you type unless you choose to send them — by unlocking a benchmark, emailing yourself a report, or contributing an anonymous data point. We do record anonymous usage events, which tool was used rather than what you entered. The AI tools work differently: your store URL and the report or concepts we generate are saved so we can support you and so your share link keeps working. We never access your Shopify admin, your customer data, or any private account information.
GLOSSARY

Learn these key metrics

Gross Margin

The percentage of revenue remaining after subtracting the cost of goods sold (CO...

Contribution MarginCM

The profit earned on each unit sold after deducting all variable costs....

Customer Acquisition CostCAC

The total cost of acquiring a new paying customer, including all marketing and s...

Landed Cost

Total cost to bring a product to your warehouse, including product cost, shippin...

Average Order ValueAOV

The average dollar amount customers spend per order/transaction....

Browse all glossary terms

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