What is e-commerce profit?
E-commerce profit per order is the money left from a sale after every cost of that order is paid. Revenue is what the customer pays you: the item price after any discount, plus the shipping you charge. Costs include the product itself, shipping and packaging, marketplace and payment processing fees, advertising, and any other per-order costs.
Looking only at selling price minus product cost overstates profit. Fees and shipping often take a large share of each sale, which is why this calculator lists every cost separately.
How to calculate profit per order
- Item price after discount = selling price − discount
- Customer payment (revenue) = item price after discount + shipping charged to the customer
- Platform fee = fee base × platform fee % + platform fixed fee. The fee base is either the item price only or the total customer payment.
- Payment fee = fee base × payment fee % + payment fixed fee
- Advertising = advertising cost per order + customer payment × advertising %
- Total costs = product cost + shipping cost + packaging + platform fee + payment fee + advertising + additional costs
- Net profit per order = customer payment − total costs
Profit margin formula
Net profit margin = net profit per order ÷ customer payment × 100
If the customer payment is zero (for example, a 100% discount with free shipping), the margin cannot be calculated and the calculator shows it as not available rather than 0%. A negative margin means the order loses money.
Worked example
A product sells for $40.00 with a 10% discount and $5.00 shipping charged. It costs $14.00 to buy, $6.50 to ship and $0.80 to pack. The example uses an 8% + $0.30 platform fee and a 3% + $0.30 payment fee, both on the total customer payment, and $3.00 of advertising per order. These fee rates are illustrative only.
| Item price after 10% discount | $36.00 |
|---|---|
| Customer payment (revenue) | $41.00 |
| Product cost | − $14.00 |
| Shipping cost | − $6.50 |
| Packaging | − $0.80 |
| Platform fee (8% of customer payment + $0.30) | − $3.58 |
| Payment fee (3% of customer payment + $0.30) | − $1.53 |
| Advertising | − $3.00 |
| Total costs | $29.41 |
| Net profit per order | $11.59 |
| Net profit margin | 28.27% |
Selling price minus product cost alone would suggest $26.00 per order. After the discount, fees, shipping and advertising, the order actually earns $11.59.
What costs are included?
- Product cost (what one unit costs you)
- Shipping you pay the carrier, and packaging
- Platform or marketplace fees, as a percentage and/or a fixed amount per order
- Payment processing fees, as a percentage and/or a fixed amount per order
- Advertising, as a cost per order and/or a percentage of revenue
- Up to five additional per-order costs you add yourself
- Discounts, which reduce revenue before fees are calculated
What costs are excluded?
- Sales tax, VAT and GST. Enter all amounts excluding tax.
- Income tax or corporation tax on your profits
- Currency conversion and international card fees
- Refunds, returns and chargebacks, unless you add them as an additional cost
- Storage, warehousing and other fulfilment fees not entered above
- Fixed overheads such as software subscriptions, rent and salaries
Platform and payment fee structures vary and change over time. The default values in the calculator are examples, not the fees of any particular marketplace or payment provider. Check your own fee terms.
Frequently asked questions
Is profit margin the same as markup?
No. Margin is profit divided by the selling price (here, the customer payment). Markup is profit divided by cost. A product that costs $60 and sells for $100 has a 40% margin but a 66.7% markup.
Why does shipping charged to the customer count as revenue?
Because the customer pays it to you. The calculator adds it to the item price to get the customer payment, then subtracts your actual shipping cost as a cost. If you charge less for shipping than it costs you, the difference reduces your profit.
Should the platform fee apply to the item price or the total payment?
It depends on the platform. Some marketplaces charge their percentage fee on the item price only, while others include shipping. Choose the option that matches your platform's fee terms. Payment processors usually charge on the full amount the customer pays.
Are taxes included?
No. Enter every amount excluding sales tax, VAT or GST. The calculator does not apply any country's tax rules, so results are pre-tax profit per order.
What is a good e-commerce profit margin?
There is no single answer. Margins vary widely by product category, pricing strategy and business model. Use the target selling price tool to see what price you need for the margin you want, and compare it with what your customers are likely to pay.
How is the target selling price calculated?
The calculator solves for the lowest selling price whose net profit margin meets your target, keeping all other costs, fee rates, fee bases and your discount the same. The result is rounded up to the nearest 0.01 and then checked with the same profit calculation.
Do you store the numbers I enter?
No. Calculations run in your browser. If you copy a shareable link, the numbers you entered are placed in the link itself so anyone with the link can see them. Additional cost names are not included.