Calculate margin and profit per order
Your gross margin only tells half the story. Calculate all the way to what you really keep per order, after shipping, packaging, payment fees, marketplace commission and returns.
Profit per order
€8.57
34.6% of revenue excl. VAT · €1,713.06 per month
- Gross margin
- 61.6%
- Markup
- 161%
- Maximum cost per customer (marketing)
- €8.57
How it adds up (per order)
- Revenue excl. VAT
- €24.75
- Cost price
- − €9.50
- Shipping and packaging
- − €5.40
- Payment fees
- − €0.74
- Returns (average per order)
- − €0.55
- Profit per order
- €8.57
The formulas
- Gross margin = (selling price excl. VAT − cost price) / selling price excl. VAT
- Markup = (selling price excl. VAT − cost price) / cost price
- Profit per order = revenue excl. VAT − cost price − shipping − packaging − payment fees − commission − return costs
- Selling price for a target margin = cost price / (1 − margin). For a 60% margin on a €9.50 cost price: 9.50 / 0.4 = €23.75 excl. VAT.
We calculate returns as an average per order: the return rate × (cost per return + the shipping costs you lose). Marketplace commission is usually charged on the price including VAT and shipping costs. Check the rates of your own marketplace and payment provider.
Frequently asked questions
How do you calculate the margin?+
Margin = (selling price excl. VAT − cost price) / selling price excl. VAT × 100%. If you sell something for €24.75 excl. VAT (€29.95 incl. 21%) with a cost price of €9.50, your gross margin is (24.75 − 9.50) / 24.75 = 62%.
What is the difference between margin and markup?+
Margin is calculated from the selling price, markup from the cost price. In the example above, the markup is (24.75 − 9.50) / 9.50 = 161%. So a markup of 100% is a margin of 50%.
Why do I keep much less than my margin?+
Because each order has costs that aren’t in your cost price: shipping, packaging, payment fees, commission and returns. For small products, shipping and packing together are often more than half of what you keep. That’s why this tool calculates all the way to the profit per order.
What is a good margin for a webshop?+
That varies a lot by sector. Many webshops aim for a gross margin of 40 to 60%. Below 30% it becomes hard to pay for shipping, marketing and returns, especially if you also advertise.
What does "maximum cost per customer" mean?+
That’s what you can spend on marketing per order before you make a loss: your profit per order before advertising costs. If you spend more per order on ads, you lose money. The ROAS calculator shows which ROAS you need for that.
Need help?
Fulfilment companies that can help you with this
Shipping and packing are often the biggest cost per order. Ask a fulfilment company what it would cost for you.
The order follows our guide; this is how we rank.