Calculate your actual profit after all costs. Know exactly how much you're making on each product sale.
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Learn how to calculate, analyze, and improve your e-commerce profit margins
Profit margin is the percentage of revenue that remains as profit after all costs. A 30% margin means you keep $30 from every $100 in sales.
Healthy e-commerce margins range from 20-40%. Fashion typically sees 40-60%, while electronics might be 10-20% due to competition.
Don't forget platform fees (2-3%), payment processing (2.9% + $0.30), shipping, returns, marketing, and your time investment.
Negotiate with suppliers, optimize shipping, bundle products, increase average order value, and reduce return rates to boost profitability.
Everything you need to know about profit margins and pricing
Profit margin is profit as a percentage of selling price (profit ÷ price). Markup is profit as a percentage of cost (profit ÷ cost). A 50% markup equals a 33% profit margin.
Most successful e-commerce businesses maintain 20-40% profit margins. Fashion and accessories can achieve 40-60%, while electronics typically see 10-20% due to higher competition.
For accurate profitability, yes. Assign an hourly rate for your time (e.g., $50/hour) and include time spent on product photography, customer service, fulfillment, and marketing.
Add up all fees: Shopify (2-3%), payment processing (2.9% + $0.30), transaction fees, and any app subscriptions. Total platform fees typically range from 5-8%.
If margins are below 15%, either increase prices, reduce costs (negotiate with suppliers), or find higher-margin products. Can't sustain a business on thin margins long-term.
Review margins monthly or whenever costs change. Supplier prices, shipping rates, and platform fees fluctuate. Regular reviews ensure you stay profitable.
Yes. High-volume products can have lower margins (15-20%), while specialty or low-volume items should have higher margins (40-60%) to justify the effort.
Yes! Our calculator supports 9 major currencies including USD, EUR, GBP, CAD, AUD, NGN, ZAR, KES, and GHS. Select your preferred currency from the dropdown.
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