Product Margin
Calculator
Enter your product cost, selling price, platform fee, and payment fee. See gross profit, net profit, gross margin %, net margin %, and markup % — instantly.
Pricing
Platform & Payment Fees
Gross Profit per Unit
Fill in your product cost and selling price — results update live.
Gross Profit
Price − cost only
Net Profit
After all fees
Gross Margin %
Before platform fees
Net Margin %
After all fees
Markup %
Profit over cost
What is product margin?
Product margin tells you what percentage of your selling price is actual profit — before or after fees depending on which margin you're measuring.
Gross Margin %
The percentage of revenue remaining after subtracting only the product cost. It tells you how much room you have to cover fees, ads, and overhead before reaching net profit. Formula: (Price − Cost) ÷ Price × 100.
Net Margin %
Gross margin minus platform fees and payment processing — the percentage of revenue you actually keep. This is the number that matters for evaluating whether a product is worth selling at scale.
Why margin beats raw profit
A $10 profit sounds good. But on a $12 product it's an 83% margin — excellent. On a $200 product it's a 5% margin — barely viable. Margin normalises profit relative to price, making different products comparable.
Target margins for ecommerce
Gross margins of 40–60% are a common target, leaving room for fees and ad spend. Net margins of 20–30% after all platform and payment fees are considered healthy for scaling with paid traffic.
How fees erode margin
A 50% gross margin product on Amazon (15% fee + 2.9% payment fee) loses 17.9% of revenue to fees alone — shrinking net margin to ~32%. On eBay (13.25% + 2.7%) it drops to ~34%. Fees always eat gross margin first.
Gross profit vs gross margin
Gross profit is the dollar amount you keep before fees: Price − Cost. Gross margin is that same profit expressed as a percentage of price. Both matter — dollar profit for absolute comparisons, margin for scalability analysis.
Margin vs markup — what's the difference?
Margin and markup measure the same profit from two different angles. Confusing them leads to under-pricing — a common and costly mistake for new sellers.
Margin
Profit as % of selling price
Margin is always lower than markup for the same product. Use it to compare profitability across products and set pricing floors.
Markup
Profit as % of cost
Markup is always higher than margin for the same product. Wholesale and manufacturing industries commonly use markup when setting trade prices.
| Markup % | Equals Margin % | Example: cost $20 | Sell price |
|---|---|---|---|
| 25% | 20% | $20 + 25% | $25.00 |
| 50% | 33.3% | $20 + 50% | $30.00 |
| 100% | 50% | $20 + 100% | $40.00 |
| 150% | 60% | $20 + 150% | $50.00 |
| 300% | 75% | $20 + 300% | $80.00 |
Example margin calculation
A product costing $14 sold for $49.99 on Shopify with standard payment processing. Here's every number broken down.
Inputs
Gross Figures
Net Figures
Summary
Frequently asked questions
Common questions about margins, markup, and how platform fees affect your real product profitability.
Gross margin expresses profit as a percentage of your selling price. Markup expresses profit as a percentage of your cost. A product costing $10 sold for $15 has a 33% gross margin but a 50% markup. The distinction matters because pricing decisions (and investor conversations) typically use margin, while procurement and wholesale use markup. This calculator shows both so you can communicate clearly in any context.
For ecommerce, a gross margin of 40%+ is considered strong. 20–40% is workable but leaves less room for fees and ad spend. Below 20% becomes difficult to scale profitably once platform fees, payment processing, and ad costs are added on top. The calculator's health thresholds reflect these benchmarks: Strong (≥40%), Average (20–40%), Weak (0–20%), Loss (below 0%).
Platform fees, payment fees, and ad costs are almost always expressed as a percentage of your selling price — meaning they eat directly into your gross margin. A 15% platform fee on a 30% margin leaves you with 15% gross — half gone. The same fee on a 50% margin still leaves 35%. Gross margin is the right lens for evaluating how much headroom you have for operational costs. Markup on its own doesn't tell you that.
Gross margin is profit after deducting product cost only. Net margin deducts all additional fees on top of that — platform fee, payment processing, and any other per-sale costs. Net margin is what you actually keep from each sale. Because platform and payment fees combined typically run 5–20% of sale price, net margin is often significantly lower than gross. Always check net margin before deciding whether a product is viable at scale.
The calculator is mathematically precise given the numbers you input. The platform presets use published fee rates for each channel. For the most accurate results, use your actual cost from your supplier invoice and the fee rate that applies to your specific plan or category. Results won't account for volume discounts, negotiated rates, or subscription plan fee reductions — adjust the fee fields manually if those apply to you.