Ecommerce Profit Margin Calculator
Enter your selling price, costs, fees, and advertising spend per unit. The calculator shows three views of your margin — gross, contribution (pre-ads), and net (fully-loaded) — so you can see exactly how much each cost layer eats into your profit, and whether the order is actually profitable once paid acquisition is included.
Contribution Margin
47.00%
before ad spend
Net Margin
31.00%
fully-loaded
Net Profit per Unit
$15.50
fully-loaded · all costs included
Gross Margin (COGS only)
60.00%
$30.00· excludes fulfillment & ads
Cost breakdown
| Selling price | $50.00 |
| Cost of goods (COGS) | −$20.00 |
| Shipping cost | −$5.00 |
| Packaging cost | $0.00 |
| Payment fee | −$1.50 |
| Platform fee | $0.00 |
| Returns allowance | $0.00 |
| Ad spend per unit ★ | −$8.00 |
| Net profit | $15.50 |
★ Ad spend per unit — the cost sellers most often exclude
Margin layers
How it works
Gross margin is the starting point: price minus cost of goods sold, divided by price. It tells you the upper bound of what you could keep before operational costs. Most sellers know this number. It is useful for supplier negotiations and product selection, but it overstates real profitability because it ignores every cost between manufacturing and the customer's doorstep.
Contribution margin strips out the fulfillment costs: shipping, packaging, payment processing fees, and platform transaction fees. This is the number you actually make on each order before accounting for how you found the customer. Contribution margin is a legitimate internal metric — if it is negative, the product is not viable at any advertising spend. But many sellers stop here and believe it represents their profit, which is where the gap opens.
Net margin (fully-loaded) deducts ad spend per unit — total advertising cost divided by units sold from those ads. This is the honest number. If you spend $800 on Facebook ads to sell 100 units, each unit carries $8 of ad cost. A 47% contribution margin drops to 31% fully-loaded. Sellers who exclude ad spend at the unit level consistently overestimate profitability and scale losing products. This calculator makes that gap impossible to miss.
Frequently asked questions
What is the difference between contribution margin and net margin here?+
Contribution margin deducts all fulfillment costs (shipping, packaging, payment fees, platform fees) from the selling price, but excludes advertising spend. Net margin — which this calculator calls the fully-loaded view — also deducts ad spend per unit sold. The gap between the two is the exact percentage-point drain from paid customer acquisition. If your contribution margin is 40% but your ad spend per unit is $8 on a $50 product, your net margin is 24%. Many sellers report the 40% figure and wonder why their bank account does not grow with sales.
How do I calculate ad cost per unit?+
Divide total ad spend in a period by units sold from that spend. If you spent $1,200 on Google Shopping ads in a week and sold 150 units attributed to those ads, ad cost per unit is $8. If your ads drive both direct sales and organic discovery, you can apportion spend across total units sold — but be consistent about the method. This number is not fixed: it changes with your conversion rate, bid strategy, and competition. Recalculate it regularly and update this calculator to see how margin shifts when your customer acquisition cost moves.
Should I include platform fees like Shopify or Amazon separately?+
Yes, and the distinction matters. The payment fee covers credit-card interchange and processor markup (typically 2.9% + $0.30 per transaction on Stripe, or a fixed rate on Shopify Payments). The platform fee is a separate transaction charge some platforms add when you use a non-native payment gateway — Shopify charges 0.5–2% depending on the plan. On Amazon, the referral fee (typically 8–15%) functions as a combined platform and payment fee and should be entered in one of those fields. Check your platform's fee schedule and enter the numbers that apply to your specific situation. This calculator does not give tax, accounting, or platform-specific advice.