True Profit Margin Calculator
Deduct ad spend, fulfillment, and product costs to determine your actual net margin.
How the True Profit Margin Calculator Works
Revenue is not profit. This calculator shows what is left of each sale after you pay for the product, the ads that brought the customer in, and shipping and fulfillment.
Enter your selling price, product cost, ad cost per purchase, and shipping cost. The tool adds up your total cost per order, subtracts it from the price, and shows your net profit and net profit margin. The result card turns green for a profitable order and red when the order loses money, so you can spot unprofitable products before you scale ad spend.
Key Formulas Behind This Tool
- Total Cost per Order: Product Cost + Ad Cost per Purchase (CPA) + Shipping & Fulfillment
- Net Profit: Selling Price - Total Cost per Order
- Net Profit Margin (%): (Net Profit / Selling Price) x 100
Frequently Asked Questions (FAQ)
What is the difference between gross margin and net profit margin?
Gross margin only subtracts product cost from the price. Net profit margin also subtracts ad spend and fulfillment, so it shows what you actually keep from each order.
What is a good net profit margin for an online store?
Many healthy e-commerce stores aim for a net margin of 10% to 20% after ad spend. The right target depends on your niche, repeat purchase rate, and how much you reinvest in growth.
Why is my store losing money even though sales are growing?
Growing revenue can hide a negative margin. If ad cost, shipping, and product cost add up to more than the selling price, every extra order increases your loss. Use this calculator to test each order before you scale spend.
What should I enter for Ad Cost per Purchase (CPA)?
Enter your total ad spend divided by the number of purchases it produced. You can find this in Meta Ads, Google Ads, or TikTok Ads as cost per purchase.