Profit Margin Calculator
Calculate your ecommerce profit margins with precision. Optimize pricing strategies for maximum profitability.
Input Details
Results
Understanding Profit Margins
Profit margin is a key metric that shows the percentage of revenue that exceeds the costs of producing and selling your product. It’s essential for pricing strategy and business sustainability.
How We Calculate
Our calculator uses the following formula to determine your profit margin:
Profit Margin = [(Selling Price – Cost Price – Additional Expenses) / Selling Price] × 100
Where additional expenses include:
- Shipping fees
- Transaction fees (payment processing)
- Taxes
- Any other per-item costs
Interpreting Your Results
40%+ margin: Excellent profitability – your pricing is working well
20-40% margin: Healthy profitability – standard for most ecommerce
10-20% margin: Low profitability – consider cost reduction or price increase
Below 10% margin: Unsustainable – immediate pricing strategy review needed