How to read your result
The results run through one pipeline: net revenue minus every cost that scales with the order gives contribution profit — the single most useful per-order number, since positive contribution means each order helps cover overhead and negative contribution means volume makes things worse. Subtracting fixed overhead per order gives net profit, which is volume-dependent — the same product can be net-profitable at 600 orders a month and loss-making at 150. Watch the break-even ROAS card especially closely if you run paid ads: a 3× ROAS the ad platform reports as a win can still lose money if your break-even ROAS is 3.5×, because ROAS measures revenue per ad dollar, not margin. Switch to Channel Comparison to see the same product under different fee structures, or Scenario Planner to stress-test a discount, free shipping, or heavier ad spend before committing.
Worked example
A $40 product with $4.95 shipping charged collects $44.95 per order. Costs: $12 COGS + $0.80 freight + $1.20 packaging + $1.50 pick-pack + $1.60 payment fees (2.9% + $0.30) + $5.50 outbound shipping + $0.84 return allowance (4%) + $6 ads = $29.44.
Contribution = 44.95 − 29.44 = $15.51 per order (34.5%). With $3,000 of monthly overhead spread over 600 orders ($5/order), net profit = $10.51 (23.4%), or roughly $6,304 a month.
Two decisions fall out of the same pipeline: the fixed overhead breaks even at 194 orders a month, and the ad campaign needs at least a 2.09 ROAS to avoid losing money per order — well below the 3-4× a dashboard might call "good," but the number this specific cost structure actually requires.
Assumptions and limitations
- This models ONE representative order — not bookkeeping, a P&L, or a tax computation.
- Platform fee presets are examples only. Fees vary by country, category, plan, and date — verify current rates on the platform, gateway, and marketplace fee pages before relying on a result.
- Return and chargeback losses are expected values (rate × cost); real losses arrive lumpily and depend on resale recovery and condition grading.
- Monthly and yearly projections assume order volume and per-order economics stay constant — fee tiers, carrier rates, and ad efficiency all change with scale.
- Income taxes, working-capital timing, inventory carrying costs, and customer-lifetime effects (repeat orders, LTV) are out of scope; for acquisition economics over a customer’s lifetime see the LTV:CAC calculator.
- Soft benchmarks only: there is no single "good" ecommerce margin — category, channel, country, fulfilment model, ad intensity, return rates, and product type all shift the bar.
For the classic revenue-to-net-margin view see the profit margin calculator; to price from cost see the markup calculator; for volume break-even see the break-even calculator; for ad-spend break-even on its own see the break-even ROAS calculator.
Read the guides
For the full walkthrough of fees, shipping, ad spend, and returns math with more worked examples, see Ecommerce Profit: Fees, Shipping, Ads, Returns, and Real Margin.
Running paid ads on these orders? See Break-Even ROAS Explained for Small Business Advertising.