How to use the e-commerce profit calculator
Enter one typical order. If your products vary a lot, run the calculator for your best seller and your average order separately.
- Price and product cost. The selling price is what the customer pays for the item. The product cost is the landed cost: what the unit costs you once it reaches your warehouse, with inbound freight and duties included.
- Shipping and packaging. Enter what you charge the customer for shipping (0 for free shipping) and what the carrier or fulfillment service charges you. Packaging covers boxes, inserts and any pick-and-pack fee.
- Fees. Your payment processor’s statement shows its percentage and fixed fee per transaction. If you sell on a marketplace, enter its referral fee or commission from the fee schedule; marketplaces often include payment processing in that fee, so set the processor fields to 0 in that case.
- Advertising. Enter either a dollar cost per order or your ACOS. For a blended figure, divide the month’s ad spend by all orders.
- Returns. Enter the share of orders that come back and what each return costs you in postage and handling.
- Orders and fixed costs. Monthly orders and the fixed costs you pay regardless of sales (store subscription, apps, salaries, rent) turn profit per order into monthly net profit.
How profit per order is calculated
Fees = R × (Payment % + Platform %) + Fixed transaction fee
Returns = Return rate × (Price − Product cost + Cost per return)
Profit before ads = R − Product cost − Shipping paid − Packaging − Fees − Returns
Profit per order = Profit before ads − Ad cost per orderWith ACOS, ad cost per order = ACOS × R. Returned orders are assumed to be refunded the item price but not the shipping charge, with the item restocked and fees not refunded.
Maximum CPA = Profit before ads
Monthly net profit = Profit per order × Orders − Fixed costsCPA is the cost per acquisition: the ad spend needed to win one order.
A worked example
Store A sells a product for $48 and charges $4.99 for shipping, so each order brings in $52.99. The product costs $15, postage $7.40 and packaging $1.20. Card processing at 2.9% plus $0.30 takes $1.84.
With an 8% returns rate and $6.50 per return, the expected cost of returns is $3.16 per order. That leaves $24.39 before advertising, which is also the most the store can pay in ads per order: the break-even ROAS is 2.17×.
At $12 of ad cost per order, profit is $12.39 per order, a 23.4% margin. Across 600 orders a month, that adds up to $7,436, and $2,936 after $4,500 of fixed costs. The store covers its fixed costs from order 364 onward.
What moves profit per order the most
| Change from the example | Profit per order | Margin |
|---|---|---|
| The example | $12.39 | 23.4% |
| Ads cost $16 per order instead of $12 | $8.39 | 15.8% |
| Returns rate 20% instead of 8% | $7.65 | 14.4% |
| Sold on a marketplace with a 15% fee (no separate card fee) | $6.28 | 11.9% |
| Ads at a 20% ACOS | $13.80 | 26.0% |
Advertising is usually the biggest lever and the least stable one. A few dollars more per order, from rising auction prices or a weaker campaign, can take a third of the profit. Returns matter most in categories like clothing and shoes, where return rates are high and each return costs postage both ways. Marketplace fees are predictable but large: in the example the 15% fee costs $7.95 per order and raises the break-even ROAS from 2.17× on the store’s own site to 2.90×.
Break-even ROAS and max CPA
The two numbers say the same thing in different units. Maximum CPA is the most you can spend in ads to win one order, $24.39 here. Break-even ROAS turns that into the ratio ad platforms report: every $1 of ads must bring in at least 2.17× of revenue.
Your actual ROAS in the example is 4.42×, comfortably above break-even. Keep in mind which figure you are comparing with. Platform ROAS counts only the orders the platform attributes to itself, often including customers who would have bought anyway. A blended figure, total revenue divided by total ad spend, is a stricter test of whether advertising pays. Repeat purchases work the other way: a customer who buys again without ads can justify a first-order CPA above break-even, as long as you know your repeat rate.
Free shipping or a shipping charge
Building shipping into the price looks the same on paper: a $52.99 order either way. Profit per order, though, falls slightly to $11.99 from $12.39, because refunds on returned items are now refunds of a higher price. Whether free shipping pays depends on whether it lifts conversion enough to cover that, which only a test with your own customers can show.
What this calculator does not include
- Sales tax or VAT. Collected on top of the price in the US and remitted to the state, so leave it out of the selling price.
- Discounts and coupons. Enter the price customers actually pay after codes and promotions.
- Inventory costs. Storage fees, unsold stock, write-offs and the cash tied up in inventory are not per-order costs here; add storage to fixed costs.
- Chargebacks and fraud, which add a cost on a small share of orders.
- Partial refunds and exchanges. The return model assumes a full refund of the item price; exchanges cost postage but keep the sale.
- Customer lifetime value. Profit is for one order; repeat purchases are not counted.