How to Calculate Profit Margin for an Online Store

Updated November 2026

Net profit margin = net profit ÷ revenue. For an online seller, net profit is what's left after everything: product cost, platform fees, payment processing, shipping labels, packaging and ads.

Example order

Buyer pays $25 (item) + $4.99 shipping = $29.99 revenue
Product cost $7.00, shipping label $5.20, packaging $0.60
Platform + processing fees $3.30

Net profit = 29.99 − 7.00 − 5.20 − 0.60 − 3.30 = $13.89. Margin = 13.89 ÷ 29.99 = 46%.

Common mistakes

Using item price instead of total revenue: shipping you charge is revenue, and the label is a cost.
Forgetting small fixed fees: $0.20–$0.45 per order matters on cheap items.
Confusing margin and markup: a 100% markup (cost $10, price $20) is a 50% margin before fees.
Looking only at averages: a few money-losing orders hide inside a healthy-looking month.

Check any single sale with the free fee calculators.

Track profit on every order automatically

The Seller Profit & Inventory Tracker spreadsheet does this math for every order you sell, keeps your inventory up to date and builds a monthly profit dashboard. Works in Excel and Google Sheets, with fees pre-set for Etsy, Amazon, eBay, Shopify and TikTok Shop.

Get the spreadsheet: $12