Profit Margin Calculator
Enter your price and costs to see gross margin, net margin, markup, profit per order, and the break-even ROAS your ads need to hit — all in one place.
Your product economics
Shopify Payments is ~2.9% + 30¢; adjust for your plan and gateways
Healthy Shopify margin benchmarks
Your results
Turn every order into more profit
For DTC and ecommerce brands looking for a fast, code-free way to increase AOV and boost cart conversions through intelligent upselling.
How profit margin is calculated
Gross margin % = (Price − COGS) ÷ Price × 100
Net margin % = (Price − COGS − Shipping − Fees) ÷ Price × 100
Markup measures profit against your cost, while margin measures it against your price — the two are easy to confuse and pricing off the wrong one erodes profit. Net margin is what actually lands in your pocket after every per-order cost.
Because break-even ROAS is the inverse of your gross margin, improving margin (through pricing, sourcing, or higher-value orders) directly loosens how hard your ads have to work to stay profitable.
Frequently asked questions about profit margin
What is a good profit margin for a Shopify store?
Gross margins of 50–70% are healthy for most Shopify product businesses, leaving room for ads, apps, and operating costs. After all expenses, a net margin of 10–20% is considered solid for ecommerce. Dropshipping and low-cost goods often run thinner gross margins (15–30%), which makes AOV and repeat purchase rate critical to profitability.
What is the difference between margin and markup?
Markup is profit as a percentage of cost (Price − Cost) ÷ Cost. Margin is profit as a percentage of price (Price − Cost) ÷ Price. A product that costs $10 and sells for $20 has a 100% markup but only a 50% margin. Merchants often confuse the two — pricing off markup while quoting margin leads to under-pricing.
How do I calculate gross profit margin?
Gross Margin % = (Selling Price − Cost of Goods Sold) ÷ Selling Price × 100. If you sell a product for $50 that costs you $20 to make and source, your gross profit is $30 and your gross margin is 60%. This is before payment fees, shipping, ads, and overhead.
What is break-even ROAS and how is it related to margin?
Break-even ROAS = 1 ÷ Gross Margin. It is the minimum return on ad spend you need before ads start losing money. A 50% gross margin needs a 2.0× break-even ROAS; a 33% margin needs 3.0×. Higher margins let you profitably bid more aggressively on ads, which is why margin and ad strategy are tightly linked.
How do upsells improve my margins?
In-cart upsells and bundles increase order value without a proportional increase in fixed costs like shipping, payment processing minimums, and customer acquisition. Because those costs are largely fixed per order, every extra dollar of upsell revenue carries a higher marginal profit — often lifting blended net margin by several points.
Related free Shopify tools