Ecommerce & Shopping

Ecommerce Profit Margin

Calculate true ecommerce profit after COGS, platform fees, shipping, and ad spend.

Ecommerce profitability is often misleading when you only look at sales revenue. This calculator accounts for all the real costs: product cost, marketplace fees (Amazon/Shopify/Etsy), shipping, transaction fees, and advertising spend to show your true net margin.

Enter your numbers

Selling Price ($)

Product Cost (COGS) ($)

Platform Fee (%)

Amazon: 8-15%, Shopify: 0%, Etsy: 6.5%

Shipping Cost ($)

Ad Spend Per Sale ($)

Total ad spend ÷ number of sales

Results update as you change the inputs. Calculations run in your browser.

Net Profit Per Unit

$22.49

net Margin: 45.0% net margin
total Costs: $27.50 total costs
platform Fee Amt: $7.50 platform fee

See the formula

Formula and method

Net Profit = Price - COGS - Platform Fee - Shipping - Ad Spend

Full cost stack from selling price. Platform fees are a percentage of selling price. Shipping and ad spend are variable costs per unit. Net margin = net profit / selling price × 100.

Worked examples

Amazon FBA product at $45

Selling Price ($):: 45
Product Cost (COGS) ($):: 8
Platform Fee (%):: 15
Shipping Cost ($):: 4.5
Ad Spend Per Sale ($):: 5

Net Profit Per Unit: $20.75

Shopify DTC product at $60

Selling Price ($):: 60
Product Cost (COGS) ($):: 15
Platform Fee (%):: 0
Shipping Cost ($):: 6
Ad Spend Per Sale ($):: 12

Net Profit Per Unit: $27.00

Assumptions and limits

No returns factored in
Platform fee is a flat percentage
Payment processing fee not included separately

This tool provides an educational estimate. Rules, rates and personal circumstances can change the answer. Review the assumptions before relying on a result. Report a correction.

Common mistakes to avoid

Forgetting payment processing fees — Shopify charges 2.9% + $0.30, PayPal charges 3.49% + fixed fee.
Using cost of goods without including inbound shipping and customs — landed cost can be 20-40% more than factory price.
Not including returns — a 5-10% return rate on a $50 item adds $2.50-$5 per unit in real cost.

Frequently asked questions

What is a good ecommerce profit margin?

Net margins of 10-20% are typical for ecommerce. Physical products: 15-30% gross margin is common. After platform fees, shipping, and ads, many sellers net 10-20%. Dropshipping often nets 10-15%. Private label can net 25-40%.

What are Amazon FBA fees?

Amazon charges: Referral fee (8-15% depending on category) + FBA fulfillment fee ($3-$7+ per unit depending on size/weight). A typical $30 product might incur $4.50 referral + $4.00 FBA = $8.50 in fees before COGS.

How much should I spend on ads per sale?

Target a TACOS (Total Advertising Cost of Sales) of 10-15% of revenue. If you sell at $50, budget $5-$7.50 in ad spend per unit. New products often need higher ad investment (20-30%) to build ranking, then taper down.