E-Commerce Tools

Advanced Profit Margin Calculator

Calculate true net profit by factoring in payment gateways, shipping, fulfillment, and CAC. 100% free, private client-side processing.

Core Pricing

$

Base manufacturer cost or landed cost.

$

Final price customer pays.

Variable Fees & Costs

$
$

Standard Stripe fee is 2.9%

$

Stripe: ~0.30 per charge

$

Profit Summary

Net Profit per Unit

$0.00
Net Margin
0.00%
Markup
0.00%

Cost Breakdown

Total Revenue:$0.00
Product Cost:-$0.00
Total Fees:
-$0.30
Gross Margin (Pre-fee):0.00%

The Ultimate Guide to E-Commerce Profit Margins

Understanding the difference between gross margin, net margin, and markup is the foundation of any scalable e-commerce business. While they all utilize the same foundational revenue data, they offer vastly different perspectives on the sustainability of your pricing strategy.

Gross Margin vs. Net Margin

Gross Margin represents the percentage of total sales revenue retained after incurring the direct, baseline costs associated with acquiring or manufacturing the product. It tells you if your core unit economics work.

Gross Margin = ((Selling Price - Product Cost) / Selling Price) × 100

Net Margin is the true north metric. It reveals exactly what is left over after all variable expenses are deducted. This includes flat-rate shipping costs, 3PL fulfillment fees (pick and pack), Customer Acquisition Cost (CAC/Ad Spend), and those insidious payment gateway fees (like Stripe's standard 2.9% + 30¢).

Net Margin = (Net Profit / Selling Price) × 100

Why Markup is not Margin

A common pitfall for new sellers is confusing Markups with Margins. Markup shows how much higher your selling price is than your pure product cost. A 100% markup on a $50 item gives you a $100 selling price. However, your Margin in that scenario is 50%, not 100%.

Markup = ((Selling Price - Product Cost) / Product Cost) × 100

Using our completely free, client-side calculator above allows you to aggressively model your pricing tiers for Shopify, WooCommerce, or FBA. Best of all, because the JavaScript executes entirely directly within your browser, your financial experiments remain completely private and secure.