E-commerce profit margin calculator
The figure here is contribution margin: what one more order adds after everything that scales with it. It deliberately excludes rent, salaries and software subscriptions, because those do not change when you sell one more unit. Contribution is the right number for deciding whether to run a promotion or bid higher on an ad; net margin is the right number for deciding whether the business works.
Contribution per order is the order value less goods, fulfilment, payment fees and acquisition cost. A 75 order with 28 goods, 7 fulfilment, 3.4% fees and 12 acquisition contributes about 25.15: a 33.5% contribution margin.
How to work out per-order economics
Unit economics is the discipline of asking whether one more order makes money, and it is where most struggling online shops discover the answer is no. A store can grow revenue rapidly on negative contribution and look healthy right up until the funding runs out. The two levers that fix it are average order value and repeat purchase rate: raising either spreads a fixed acquisition cost across more revenue, whereas cutting cost of goods usually moves the number far less than expected.
Questions
Revenue less all variable costs. It is what one more sale contributes toward fixed costs and profit.
For a paid-traffic store, absolutely. It is variable, it scales with orders, and it is usually the biggest line.
Thirty per cent or better gives room to grow. Under twenty leaves nothing for overheads and no margin for error.
Raise average order value or repeat rate. Both spread a fixed acquisition cost over more revenue.
No. Fixed costs; rent, salaries, software. Come out of contribution before you reach profit.