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E-commerce Profit Margin Calculator

Analyze your product profitability and break-even points instantly.

Net Profit
$0.00
Profit Margin
0.00%
Total Costs
$0.00
Markup
0.00%

Understanding E-commerce Profit Margins

Profit margin is the ultimate metric for any online retailer. While "revenue is vanity," profit is the reality that keeps your business operational. To accurately calculate your e-commerce earnings, you must look beyond the initial cost of the product.

Key Components of the Calculation

  • Cost of Goods Sold (COGS): This is what you pay the manufacturer or supplier for the product itself, including inbound shipping to your warehouse.
  • Platform Fees: Whether you sell on Amazon (typically 15%), eBay, or Shopify (transaction fees), these percentages eat into your gross revenue.
  • Shipping & Fulfillment: Includes the label cost, packaging materials (boxes, tape, bubble wrap), and labor if you use a 3PL.
  • Marketing Spend (CAC): Customer Acquisition Cost. This is your total ad spend (Facebook, Google, TikTok) divided by the number of orders generated.

Example Calculation

If you sell a premium blender for $120.00:

  • COGS: $40.00
  • Shipping: $12.00
  • Amazon Referral Fee (15%): $18.00
  • PPC Advertising per Sale: $20.00
  • Total Expenses: $90.00
  • Net Profit: $30.00
  • Profit Margin: 25%

How to Improve Your Margins

If your margins are below 15%, your business is at high risk from market fluctuations. Aim for a healthy 25-40% margin by:

  1. Optimizing Packaging: Reducing dimensional weight can save dollars on every shipment.
  2. Increasing AOV: Use bundles and upsells to spread the fixed shipping and marketing costs across a higher order value.
  3. Supplier Negotiation: As your volume increases, renegotiate your unit cost with your manufacturer.
function calculateEcommerceProfit() { var salePrice = parseFloat(document.getElementById('salePrice').value) || 0; var cogs = parseFloat(document.getElementById('cogs').value) || 0; var shipping = parseFloat(document.getElementById('shipping').value) || 0; var feesPercent = parseFloat(document.getElementById('fees').value) || 0; var marketing = parseFloat(document.getElementById('marketing').value) || 0; if (salePrice 0 ? ((salePrice – cogs) / cogs) * 100 : 0; // Display Results document.getElementById('resultsArea').style.display = 'block'; document.getElementById('resNetProfit').innerText = '$' + netProfit.toFixed(2); document.getElementById('resMargin').innerText = margin.toFixed(2) + '%'; document.getElementById('resTotalCosts').innerText = '$' + totalCosts.toFixed(2); document.getElementById('resMarkup').innerText = markup.toFixed(2) + '%'; // Set Margin Colors var marginElement = document.getElementById('resMargin'); if (margin < 10) { marginElement.style.color = '#e74c3c'; } else if (margin 0) { var maxAdSpend = marketing + netProfit; breakEvenText = "Insight: Your maximum allowable Ad Spend to stay profitable on this product is $" + maxAdSpend.toFixed(2) + " per sale."; } else { breakEvenText = "Warning: This product is currently selling at a loss. You need to increase price or reduce costs by $" + Math.abs(netProfit).toFixed(2) + " per unit to break even."; } document.getElementById('breakEvenNote').innerHTML = breakEvenText; // Scroll results into view smoothly document.getElementById('resultsArea').scrollIntoView({ behavior: 'smooth', block: 'nearest' }); }

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