eCommerce Profit Calculator
Calculate profit margins for Shopify, Amazon, and Etsy — including platform fees, shipping, returns, and ad spend
Total ad spend ÷ units sold
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Quick summary
eCommerce profitability requires accounting for all per-unit costs: product cost, shipping, platform fees (2.9–15%), return handling, and ad spend. Many sellers underestimate platform fees and return costs. Aim for 30–50% net margin on physical products — below 20% leaves little room for marketing and growth.
Reviewed by Simple Calculators TeamLast reviewed
How to use this calculator
- Enter the inputs requested by the calculator.
- Choose the units or options that match your situation and review the assumptions.
- Run or update the calculation to see the result.
- Review the result, breakdown, and formulas shown on the page.
- Check the inputs, units, dates, and limitations before saving or sharing the result.
eCommerce Profit Formula
Net Profit per Unit
- Revenue_eff
- Selling price × (1 – return rate)
- COGS
- Product cost / cost of goods sold
- Platform Fee
- Shopify: 2.9% + $0.30 | Amazon: 15% | Etsy: 6.5% + $0.20
- Returns
- Return rate × (selling price + shipping)
- Ad Spend
- Total ad spend ÷ units sold
Worked example
$49.99 product, $12 COGS, $5 shipping, Shopify fees, 5% returns, $3 ad spend
- Given
- Effective Revenue = $49.99 × 0.95 = $47.49Platform Fee = 2.9% + $0.30 = $1.75Return Cost = 5% × ($49.99 + $5) = $2.75
- Calculation
- Result
- ~$22.99 net profit per unit (46% margin)
Frequently asked questions
What is a good profit margin for eCommerce?
Industry benchmarks: 10–30% is average, 30–50% is good, 50%+ is excellent. Physical products need higher gross margins (40–60%) to cover fulfillment, returns, and ad spend. Digital products can sustain 70–90% margins. Dropshipping typically yields 15–30% margins after all costs.
How much does Shopify charge per transaction?
Shopify Payments charges 2.6%–2.9% + $0.30 per transaction depending on your plan (Basic, Shopify, Advanced). If you use a third-party payment processor instead of Shopify Payments, there's an additional 0.5–2% fee. For high-volume stores, upgrading plans can reduce per-transaction costs.
What does Amazon charge sellers?
Amazon charges a referral fee of 8–15% depending on category (most categories are 15%). For FBA sellers, add fulfillment fees ($3–$10+ per unit) and storage fees ($0.75–$2.40/cubic foot/month). FBA sellers also benefit from Prime eligibility and Amazon's logistics network.
How do I calculate break-even units?
Break-even units for a given ad campaign = total ad spend ÷ profit per unit (before ad spend). Example: if you're spending $500/month on ads and make $10/unit before ad costs, you need to sell at least 50 units to break even on advertising. Above that, every unit adds profit.
How does return rate affect eCommerce profitability?
Each return typically costs: refunded selling price + shipping both ways + restocking labor. A 5% return rate on a $50 product might cost $2.75/unit sold even for items that aren't returned, because that cost is averaged across all sales. Clothing has return rates of 20–40%; electronics 8–15%; home goods 5–10%.
Key terms
- COGS
- Cost of Goods Sold — the direct cost to purchase or manufacture each unit sold
- Platform Fee
- Percentage and/or flat fee charged by the selling platform per transaction
- Ad Spend per Unit
- Total advertising cost divided by total units sold in the same period
- Break-Even Units
- Minimum monthly sales volume needed to cover fixed costs (particularly ad spend)
- Return Rate
- Percentage of sold units returned by customers — has a compounding cost effect
Methodology, sources & limitations
This page shows the formula, assumptions, and limitations used for this estimate. Rates, thresholds, and other time-sensitive inputs can change, so verify them against the relevant official source before relying on a result.
For our review approach and the primary sources we consult, see the methodology and source policy. If you spot an outdated figure or formula, please contact us with a correction.