Formula
Gross margin before ads helps evaluate product economics. Net margin shows what remains after acquisition and operating allocations.
net margin = (selling price - all variable costs - ad cost - overhead) ÷ selling price
Pricing calculator
Ecommerce profit margin calculator
Build a true per-order margin waterfall from selling price to net profit after product cost, fulfillment, payment fees, ads, refunds, and overhead.
Inputs
Practical use
- Use gross margin before ads to evaluate whether a product has enough room for paid acquisition.
- Use net margin to decide whether the final campaign economics are acceptable.
- Add a refund reserve even if refunds are rare; it prevents optimistic pricing.
FAQ
What margin should ecommerce sellers target?
It depends on category, repeat purchase rate, and acquisition model. The calculator focuses on showing the real cost stack so you can set a target based on your business.