Profit Margin Calculator for Ecommerce
Calculate ecommerce profit margin after platform fees, shipping, and ad spend. Built for Amazon, Etsy, eBay, and Shopify sellers.
Profit margin equals profit divided by revenue. Gross margin uses cost of goods sold; net margin subtracts all costs and tax. A healthy small-business net margin is ten percent.
Ecommerce profit margins run 5-15% net for physical-product sellers and 8-20% net for digital. Ad spend, payment processing (2.9%+$0.30 on Stripe), shipping, returns, and platform fees compress that quickly. A real margin calculator separates per-order contribution margin from fully-loaded net margin — the distinction that determines profitability.
The fastest way to bankrupt an ecommerce brand is to optimise revenue while ignoring contribution margin. Top-line growth funded by a 5x ROAS on a 35% gross-margin product is a slow leak — every order makes the loss bigger because variable costs eat the margin before fixed costs are even covered.
This calculator pulls apart ecommerce P&L into the lines that actually move:
Per-order variable costs: - COGS (landed cost including supplier, freight, duties, packaging) - Payment processing (Stripe 2.9%+$0.30; PayPal 3.49%+$0.49; Shopify Payments lower) - Fulfilment (pick, pack, ship — typically $4-12 per order via 3PLs like ShipBob) - Shipping (usually subsidised or absorbed) - Customer acquisition cost (ad spend ÷ new customers)
Contribution margin = price minus all of the above. If this is negative, no volume of orders saves the business.
Period costs (fixed-ish): - Software stack (Shopify, Klaviyo, Postscript, returns tools — typically 3-7% of revenue at scale) - Salaries - Returns and refunds (apparel: 20-30%, electronics: 8-15%, beauty: 5-10%)
Net-margin benchmarks by category (Shopify and McKinsey data): - Beauty / cosmetics: 10-15% - Apparel: 5-12% - Electronics: 3-8% - Home goods: 8-14% - Supplements: 12-20%
The single biggest leverage point in DTC ecommerce isn't ad spend — it's repeat purchase rate. A brand with 30% second-order rate at 90 days is worth 2-3x a brand at 10% second-order, because CAC amortises across a longer LTV. The calculator's repeat-rate toggle models this. For DTC benchmarks, the Shopify State of Commerce report and the U.S. Census Bureau's quarterly e-commerce sales release are useful references.
Tax rate pre-filled at 21% for United States.
Inputs
Total income before any deductions
Direct costs to produce the product/service
Rent, salaries, marketing — enables operating margin
Pre-filled for United States. Edit if needed.
Gross Profit Margin
Healthy40.0%
Strong gross margin. Pricing and unit economics look healthy.
Gross profit: $20,000.00
Net Profit Margin (after tax)
Caution31.6%
Healthy net margin — bottom line is sustainable.
Net profit: $15,800.00
See the formula
See parent calculator at /profit-margin-calculator for the full formula reference.
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Methodology & sources
Rates last verified: May 2026Tax rate defaults reflect each region's headline corporate tax rate. Override the rate if your effective rate differs (e.g. UK small profits rate, US state tax additions).
Primary sources
Rates are reviewed annually or when a region changes its headline rate. If you spot one that's out of date, email [email protected].
For information only. This calculator does not constitute financial, accounting, or tax advice. Consult a qualified professional before making business decisions.