Shopify Profit Margin Calculator

Know Your Profits, Fuel Your Growth. Calculate your Shopify stores net profit margin in seconds and scale smarter.

Net Profit

Net Profit Margin

CREATED BY

Harry Chu| Founder at TrueProfit

#1 Profit Calculation on Shopify App Store

What is Net Profit?

Net profit is the total earnings your business keeps after deducting all costs, including cost of goods, operating costs, taxes, and more. It’s the ultimate indicator of profitability. Net Profit = Total Revenue - Total Costs

What is Net Profit Margin?

Net profit margin shows the percentage of your revenue that remains as profit after all costs. It’s a key metric to assess efficiency and profitability. Net Profit Margin (%) = (Net Profit ÷ Total Revenue) × 100

These metrics are crucial for understanding your business's financial health and identifying areas for growth.

What is a Healthy Profit Margin in E-Commerce?

E-commerce net profit margins typically fall into these categories:

The average net profit margin for e-commerce is about 10%. If yours is over 20%, you're ahead of most businesses—well done!

Important note: Remember, these are just averages. Your margin may vary based on your industry and business model.

Burning Questions About Net Profit. We've Got Answers!

Why TrueProfit is the best for tracking Shopify Net Profit?

TrueProfit automates accurate and real-time profit tracking so you can focus on scaling without going back and forth manual calculation or spreadsheet. With a 360-degree view of your finance, you can make profit-driven decisions with confident.

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Frequently Asked Questions

Popular questions about Shopify profits and profits calculation.

What Business Has the Highest Profit Margin?

E-commerce niches like luxury goods and digital products offer high margins. Dropshipping is also profitable due to low costs.

Can You Have a 100% Profit Margin?

Unlikely. A 100% profit margin would mean selling a product for double the cost with no costs. However, in practice, this is highly unlikely due to operational costs like marketing, shipping, and taxes. A 100% margin usually refers to markup, not actual profit.

Is 80% a Good Profit Margin?

An 80% profit margin is excellent, especially for high-margin industries like digital products. However, it’s rare in sectors with high overhead costs such as retail or manufacturing.

Is 7% a Good Profit Margin?

A 7% profit margin is on the lower end but still profitable for businesses in high-volume industries, like retail. However, for e-commerce, businesses should aim to improve this margin over time.

How Much Profit Should You Make on a Product?

Product profit depends on your industry and cost structure. Most e-commerce businesses aim for a profit margin between 10-30% on products. For optimal profitability, businesses should strive for higher margins where possible.

How to Calculate Retail Margin?

Retail margin is calculated by subtracting the cost of goods sold (COGS) from the selling price, then dividing by the selling price and multiplying by 100.

Formula: Retail Margin (%) = (Selling Price - Cost of Goods Sold) / Selling Price × 100

How to Calculate Profit Markup?

Markup is calculated by subtracting the cost price from the selling price, dividing that by the cost price, and multiplying by 100.

Formula: Markup (%) = (Selling Price - Cost Price) / Cost Price × 100

What Is the Difference Between Profit and Margin?

Profit refers to the actual earnings a business makes after deducting all costs, taxes, and costs. Margin refers to the percentage of revenue that exceeds the cost of goods sold, which indicates the business's profitability. Profit is an absolute figure, while margin is a percentage.

Is a 30% Profit Margin Too High?

A 30% profit margin is considered high and generally indicates excellent control over pricing and costs. While this margin is ideal for some industries, the ""ideal"" profit margin depends on your business model and industry sector.

What’s the Difference Between Gross Profit and Net Profit?

Gross profit shows how much money is left after covering product costs, but it doesn’t account for costs like ads, shipping, or taxes. Net profit goes deeper, revealing your true earnings after all costs. Tracking net profit is crucial to understand your real financial health and make profit-focused decisions.

Isn't high revenue the goal?

Not necessarily. A business can make millions in revenue but still lose money if costs are higher than the revenue. Hence, net profit shows what you actually earn - it’s the real measure of success.