How To Calculate Profit Per Sale (With A Free Calculator)

Most sellers know their price and what they paid for the product. Fewer know what they keep after every fee, label and ad comes out. That number is your profit per sale, and it decides whether a product is worth selling at all.

This guide walks through the formula, the costs sellers most often miss and a worked example. You can also plug your own numbers into the free ecommerce profit calculator and skip the math.

The Profit Per Sale Formula

Profit per sale = what the customer pays − product cost − shipping − packaging − ads − marketplace fees − payment processing fees

“What the customer pays” includes any shipping you charge. Marketplace and payment fees are usually a percentage of that total plus a flat amount per order. That means your fees go up when your price goes up.

Costs Sellers Forget

• Packaging. Boxes, mailers, tape and inserts add up on every order.
• Payment processing. Even on your own site, card processing takes a percentage plus a flat fee.
• Free shipping. If you offer it, the label cost comes straight out of your profit.
• Ad spend per sale. Divide your monthly ad spend by the number of orders it brought in.
• Returns and refunds. If a share of orders come back, set some profit aside to cover them.

A Worked Example

Here is a product that sells for $29.99 on a store with no marketplace fee and card processing of 2.9% plus $0.30:

• Customer pays: $29.99
• Product cost: −$9.50
• Shipping label and packaging: −$6.00
• Payment processing: −$1.17
• Ads: −$3.00
• Profit per sale: $10.32

That works out to a 34.4% profit margin. The break-even price for this product is $19.36. Below that, every sale loses money.

Margin, Markup And Break-Even Price

• Profit margin is profit divided by what the customer pays. It is the best number for comparing products.
• Markup is profit divided by your product cost. A 50% markup is only a 33% margin, which is why the two get mixed up.
• Break-even price is the lowest price that covers all your costs and fees.

How To Raise Your Profit Per Sale

• Raise your price and check how the new price changes your fees.
• Bundle products so one shipping label and one set of fees cover more revenue.
• Cut ad spend on products that never reach a healthy margin.
• Set a minimum order for free shipping instead of offering it on everything.
• Ask suppliers for better pricing once your volume grows.

Try The Free Profit Calculator

The ecommerce profit calculator does this math for you. Enter your price and costs to see your profit per sale, margin, break-even price and the price you need to hit your target margin. It is free and runs in your browser.