How to calculate ecommerce profit margin after shipping, payments, and marketing
Hajatek Team
فريق حاجتك | Hajatek Team
Bottom line: revenue is not profit. Subtract product cost, shipping, payment fees, marketing, and operating costs, then divide net profit by revenue to find your real margin.
The ecommerce profit formula
Net profit = revenue - product cost - shipping - payment fees - marketing - other costs. Profit margin is net profit divided by revenue, multiplied by 100.
For example, a store with SAR 10,000 revenue, SAR 3,500 product cost, SAR 1,000 shipping, SAR 290 payment fees, SAR 1,200 marketing, and SAR 500 other costs earns SAR 3,510 net profit: a 35.1% margin.
Costs merchants commonly miss
- Return shipping: you may pay for delivery and the return.
- Discounts: a discount cuts revenue without automatically reducing product cost.
- Payment fees: include both percentage and fixed fees.
- Customer acquisition: divide ad spend by new customers acquired.
- Packaging and support: boxes, labels, and service time are real costs.
Why profit per order matters
Profit per order shows whether growth is helping. Orders can rise while cash falls when advertising and fulfillment cost more than each order contributes. Review average order value, profit per order, and return rate together.
Three ways to improve margin
- Increase average order value with bundles and complementary products instead of random price increases.
- Compare shipping zones and rates, and set a free-shipping threshold above average order value.
- Focus marketing on the most profitable products and customers, not only the highest-selling ones.
Try your own numbers: use the free ecommerce profit calculator, then review the store launch checklist before running campaigns.