Shopify Profit Margin Calculator
Calculate your product profit margins, markup percentages, and break-even points instantly. Essential tool for Shopify store owners to price products profitably.
Calculate Your Profit Margin
Cost to manufacture or purchase the product
Price you sell to customers
Transaction fees (typically 2.9% + $0.30)
Fixed fee per transaction (typically $0.30)
Your cost to ship (not what customer pays)
Packaging, labor, marketing attribution, etc.
Additional Metrics
Excellent! Your margins are strong. You have room for marketing spend and healthy profit.
How to Use the Profit Margin Calculator
This calculator helps Shopify store owners determine if their products are priced profitably. Enter your product costs, selling price, and fees to instantly see your profit margin, markup, and break-even point.
Understanding Profit Margin vs Markup
Profit Margin is your profit as a percentage of the selling price. It shows what percentage of each sale is actual profit. Formula: (Revenue - Costs) ÷ Revenue × 100.
Markup is your profit as a percentage of the cost. It shows how much you're adding on top of your costs. Formula: (Selling Price - Cost) ÷ Cost × 100.
What's a Good Profit Margin for Shopify Stores?
- Excellent (40%+): Premium products, high-value items, or unique offerings
- Good (30-40%): Healthy margins that allow for marketing spend and growth
- Acceptable (20-30%): Moderate margins common in competitive categories
- Concerning (15-20%): Tight margins that leave little room for marketing or mistakes
- Unprofitable (<15%): Difficult to sustain with marketing costs and operational expenses
Tips to Improve Your Profit Margins
- Negotiate with suppliers: Lower COGS by ordering larger quantities or finding better suppliers
- Increase prices strategically: Test small price increases (5-10%) on bestsellers
- Reduce shipping costs: Negotiate better rates or use lighter packaging
- Bundle products: Increase average order value without proportionally increasing costs
- Eliminate low-margin products: Focus on items with healthy margins
- Add premium options: Higher-priced variants often have better margins
Common Shopify Costs to Include
Product costs (COGS): Manufacturing, wholesale purchase price, or materials
Shopify fees: Basic ($39/month), Shopify ($105/month), Advanced ($399/month) + transaction fees
Payment processing: 2.9% + $0.30 for Shopify Payments (varies by plan)
Shipping: Your actual cost to ship (USPS, UPS, FedEx, etc.)
Packaging: Boxes, tape, branded inserts, tissue paper
Marketing attribution: Portion of ad spend per product (optional but recommended)
Break-Even Analysis
The break-even price is the minimum you must charge to cover all costs without making profit or loss. Selling below this price means losing money on each sale. Your selling price should be significantly above break-even to account for returns, refunds, and profit goals.
Pro Tip
Factor in a "marketing cost per sale" when calculating margins. If you spend $500 on ads and generate 50 sales, that's $10 marketing cost per sale. Include this in "Other Costs" for accurate profitability analysis.