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You list a handmade candle for $28, feel good about the sale, and then payday arrives showing $19.40 in your account. Where did the other $8.60 go? Marketplace commission, payment processing, shipping labels, and the wax and wick you bought in the first place. The E-Commerce Profit Calculator pulls every one of those deductions into a single view so you know your real take-home before you ever hit publish. If pricing is the part of selling that stresses you most, our companion guide on pricing products for profit walks through the psychology and the math together, and this tool handles the arithmetic instantly.
Two numbers get confused constantly, so start here. Markup is the amount you add on top of cost, expressed against cost. Margin is your profit expressed against the selling price. If a product costs you $10 and you sell it for $15, your markup is 50 percent because you added five dollars to a ten-dollar base, but your margin is only 33.3 percent because five dollars is a third of the fifteen-dollar price. Sellers who set a 50 percent markup and assume they earned a 50 percent margin quietly leave money on the table on every order. The calculator computes both from the same inputs so you never mix them up.
Net profit is what remains after everything: net profit equals selling price minus product cost, minus marketplace fees, minus payment processing, minus shipping and packaging. Divide that net profit by the selling price and multiply by 100 to get your true net margin. Breakeven, meanwhile, is the price at which net profit hits exactly zero — the floor below which every sale costs you money. Knowing that floor is what lets you run a discount without accidentally selling at a loss.
Say you sell a phone case. It costs you $4.50 to buy and $1.20 to package. Amazon takes a 15 percent referral fee, and payment processing eats roughly 2.9 percent plus $0.30. You price it at $19.99. The referral fee is $3.00, processing is about $0.88, product and packaging total $5.70. Add those and you spend $9.58 to fulfill a $19.99 sale, leaving $10.41 in net profit — a healthy 52 percent net margin. Now drop the price to $9.99 for a flash sale: fees shrink, but your fixed $5.70 in goods barely moves, and net profit collapses to about $2.30. That is the moment a discount stops being marketing and starts being charity. If you want to reinvest those profits, the Compound Interest Calculator shows what steady reinvestment can become over a few years.
Enter your product cost, then your intended selling price. Add the marketplace commission for wherever you sell — Etsy, Amazon, eBay, and TikTok Shop all use different percentages, so check your platform's current fee schedule. Enter your payment processing rate and any per-order flat fee, then your shipping and packaging cost. The calculator returns net profit per unit, net margin, markup, and your breakeven price in one pass. Change any single field and every result updates, which makes it fast to test three or four price points before committing.
A net margin under 10 percent means you have almost no cushion for returns, ad spend, or a fee increase — one bad month erases the quarter. Many established physical-product sellers aim for 25 to 40 percent net after fees, which leaves room to fund marketing and absorb the occasional refund. If your breakeven price sits uncomfortably close to your selling price, you either need a cheaper supplier or a higher price point, because there is no third option that keeps you solvent. For the tax side of running a store, the IRS Small Business and Self-Employed Tax Center explains what you can deduct, and the SBA's guidance at SBA.gov covers cash-flow basics worth reading before you scale.
The first mistake is treating the marketplace fee as the only fee. Amazon's referral percentage gets the attention, but FBA storage, long-term inventory surcharges, return processing, and advertising quietly stack on top, and if you ignore them your "profitable" listing might be underwater by month's end. Pull your actual settlement reports and reconcile them against your estimates every few weeks so surprises don't compound. The second mistake is forgetting that shipping is rarely free even when you advertise it that way — you've simply folded the postage into the price, and if the price didn't rise to cover it, the shipping came straight out of your margin. The third and most expensive mistake is pricing off a competitor's sticker without knowing their cost basis; a rival selling at $12 might be buying at $2 in bulk while you buy at $6 in small lots, so matching their price guarantees you lose. Price from your own numbers, run them through the tool, and let the competition set your marketing, not your margin. A fourth trap is ignoring currency and cross-border fees when you sell internationally, which can shave several more percentage points off every order.
If you make the product yourself, yes. A candle that takes 20 minutes of your time isn't free just because you didn't pay someone else. Assign yourself an hourly rate, divide it into the time per unit, and add that to product cost. Skipping this is the single most common reason handmade sellers feel busy but broke.
Returns hit harder than most sellers expect because you often eat the original shipping, the return shipping, and sometimes the whole product if it can't be resold. If 5 percent of orders come back, spread that cost across your other 95 sales and shave your effective margin accordingly. Build a return reserve into your price rather than hoping it won't happen.
It depends on your fixed costs and how price-sensitive your buyers are. High-margin, low-volume works for distinctive products; thin-margin, high-volume works only if your fulfillment is ruthlessly efficient. Run both scenarios through the calculator and compare total monthly profit, not per-unit profit, because 50 sales at $10 beats 10 sales at $30.
Once you know your numbers, put them to work: model your business cash flow with the Savings Goal Calculator, compare a supplier loan against the Loan Payment Calculator, and browse the rest of our utility calculators or the full calculator directory when you need a different tool. Consistent margins, tracked over time, are what turn a side hustle into a business.
Disclaimer: This calculator is for informational purposes only. Verify any calculation against current official sources before relying on it for an important decision. Marketplace fees and tax rules change frequently and vary by platform and location. See our full Disclaimer.