How to use the ecommerce profit calculator
- 1Enter the selling price of one order and any shipping you charge the customer.
- 2Enter your product cost, packaging and what you pay to ship the order.
- 3Enter your payment processing fee and any marketplace or platform commission. Use 0% for the platform fee if you sell on your own store.
- 4Add your ad spend per order (or cost per acquisition), your return rate and what each return costs you.
- 5Read profit per order, margin, break-even ROAS and profit per 100 orders. Change any number and the result updates straight away.
What goes into profit per order
Online sellers often look at the gap between product cost and price and call it profit. On a real order, several more costs come out of that gap: the box and filler, the shipping label, the card processing fee, the marketplace commission, the ad that brought the customer in, and a share of the cost of orders that come back.
This calculator treats the order as the unit. Revenue is the item price plus any shipping you charge. Payment and platform fees are taken as a percentage of that revenue, because most processors and marketplaces charge on the full amount the buyer pays, shipping included. Sales tax and VAT are left out: you collect them for the government, so they are not your revenue.
Revenue = Selling price + Shipping charged Payment fee = Revenue × Payment % + Fixed fee Platform fee = Revenue × Platform % Return cost per order = Return rate × Cost per return Profit before ads = Revenue − Product − Packaging − Shipping cost − Payment fee − Platform fee − Return cost Profit per order = Profit before ads − Ad spend per order
Break-even ROAS: how much you can spend on ads
ROAS (return on ad spend) is revenue divided by ad spend. Your break-even ROAS is the point where ads eat all of the profit an order makes before advertising. If an order brings in $50 and leaves $27.80 before ads, you break even at a ROAS of 1.80: every $1.80 of revenue can carry $1 of ad spend.
Below that ROAS, each ad-driven order loses money. Above it, ads are profitable on the first order. Low-margin products need a much higher ROAS than high-margin ones, which is why the same ad account can look good for one product and poor for another. Use the "most you can spend on ads per order" figure as your ceiling for cost per acquisition.
Break-even ROAS = Revenue ÷ Profit before ads Maximum ad spend per order = Profit before ads
Counting the cost of returns
Returns are easy to forget because they do not happen on every order. A fair way to include them is to spread the cost across all orders. If 5% of orders come back and each return costs you $15, every order carries $0.75 of return cost.
Cost per return should include what you actually lose: the return label if you pay it, the original outbound shipping you cannot get back, any fees the platform keeps on refunds, and the value of stock that cannot be resold. Return rates vary a lot by category; clothing and shoes usually run far higher than homeware or consumables, so use your own figures where you can.
Return cost per order = Return rate % ÷ 100 × Cost per return
Platform and payment fees differ by store and country
On your own store (Shopify, WooCommerce, BigCommerce) you usually pay a card processing fee such as 2.9% plus 30 cents per order in the US, and no commission. On a marketplace such as Amazon or eBay you pay a referral or final value fee, often 8% to 15% depending on category, and payment processing is often included in it. The pre-filled figures are examples only. Fees vary by country, plan and category, and they change, so copy the rates from your own account statements.
Monthly subscriptions, apps and fulfilment storage are fixed costs rather than per-order costs. Leave them out here and cover them with the break-even calculator, or divide them by your monthly orders and add the result to packaging.
Worked example
A store on its own site sells a $45 product and charges $5 shipping. The item costs $12, packaging $1.20 and the label $6.50. Card fees are 2.9% + $0.30, there is no platform commission, ads cost $8 per order, and 5% of orders are returned at a cost of $15 each.
| Revenue (price + shipping charged) | $50.00 |
| Payment fee (2.9% + $0.30) | $1.75 |
| Return cost per order (5% × $15) | $0.75 |
| Profit before ads | $27.80 |
| Ad spend per order | $8.00 |
| Profit per order | $19.80 |
| Profit margin | 39.6% |
| Break-even ROAS | 1.80x |
| Profit per 100 orders | $1,980.00 |
Each order keeps $19.80, a 39.6% margin, and ads stay profitable as long as ROAS stays above 1.80. Sold on a marketplace charging 15% with payment included instead, the platform fee would be $7.50, profit would fall to $14.05 and break-even ROAS would rise to about 2.27.