How to use this calculator
- Enter the selling price charged to the customer.
- Add product cost.
- Add shipping, ads, packaging, and other variable order costs.
- Enter the payment processing percentage.
Calculate real Shopify product margin after product cost, shipping, payment fees, advertising, and packaging. Use it to see whether each order is truly profitable.
Net margin shows how much of each sale remains after direct costs. A healthy margin leaves room for advertising, refunds, overhead, and growth.
A margin below 15% usually leaves little room for paid acquisition or unexpected returns.
A product sold for $80 with $28 product cost, $18 variable costs, and 2.9% processing fee produces about $31.68 net profit.
Many ecommerce stores aim for 20% to 35% net margin after direct costs, although category, ad intensity, and fulfillment model can change the target.
Yes, for decision-making. Including ad cost per order gives a clearer view of contribution profit and scaling potential.
Payment fees reduce profit on every transaction and become more important for low-margin or low-priced products.
Increase price, reduce product cost, lower shipping cost, improve AOV, reduce returns, or improve conversion efficiency to lower ad cost per order.
A store should usually have enough contribution margin to cover CAC, refunds, overhead, and profit before scaling paid advertising.
| Metric | Use |
|---|---|
| Net Margin | Core profitability percentage. |
| Net Profit | Dollar profit per order. |
| Health Score | Indicates whether margin supports growth. |