Free Tool
Free Profit Margin Calculator
Calculate gross margin, net margin, landed cost and break-even units for any product. Built for Shopify brands importing from overseas. No signup required.
What does this calculator do?
This profit margin calculator goes beyond a simple gross margin figure. It accounts for your full landed cost (unit price + shipping + import duty + packaging), marketing spend per unit and Shopify platform fees — so you can see your true net margin per unit. It's the same calculation Canopy runs automatically for every SKU across your catalogue.
Enter your product details
The retail price your customers pay, excluding VAT.
Your factory or supplier price per unit. This is the ex-works cost before shipping, duty and packaging.
International and domestic freight allocated per unit. Divide your total shipping cost by units in the shipment.
The import duty rate that applies to your product category. Typical UK rates: 0–12%. Check the UK Trade Tariff for your commodity code.
Boxes, tissue paper, inserts, labels and any branded packaging allocated per unit.
Your average paid media spend (Meta Ads, Google) divided by units sold. Calculate as total monthly ad spend ÷ monthly units sold.
Shopify Payments charges 2.9% (Basic) to 2.4% (Advanced). PayPal is typically 2.9% + 30p. Enter the total % of your selling price paid in fees.
Your total monthly overheads — rent, salaries, software, etc. Used to calculate your break-even units per month.
Enter your selling price above to see your profit margins.
Gross margin vs net margin — what's the difference?
Gross margin
Gross margin measures what you keep after paying for the product itself — your landed cost (factory price, freight, duty, packaging). It tells you how efficient your sourcing is. A 50% gross margin means for every £1 of revenue, 50p covers the product and 50p is available to cover everything else.
Net margin
Net margin is your real profitability after every cost: COGS, marketing spend, platform fees, fulfilment and overheads. A product with a 60% gross margin but heavy Meta Ads spend might only yield a 10–15% net margin. Net margin is the number that determines whether your business is actually building wealth.
Canopy tracks margins across all your products automatically
Connect your Shopify store, enter your landed costs, and Canopy shows your gross and net margin per SKU — updated in real time as sales come in and costs change. No spreadsheets. No manual calculations.
Profit margin — frequently asked questions
For physical product ecommerce, a gross margin of 50–70% is considered healthy. Net margin (after all operating costs) of 10–20% is a realistic target for established brands. However, margins vary significantly by category: beauty and fashion brands often achieve 60–80% gross margin; electronics and tech accessories are typically 30–50%. The more important number is net margin — the profit remaining after every cost, including marketing spend, platform fees and fulfilment.
Gross margin is revenue minus the cost of goods sold (COGS), expressed as a percentage. It measures production efficiency. Net margin is revenue minus all costs — COGS, marketing, platform fees, fulfilment, overheads — and is the true profitability measure. A product can have a 60% gross margin but a 5% net margin if marketing costs are high. Most ecommerce brands focus too much on gross margin and are surprised by their actual profitability.
Landed cost is the total cost of bringing a product from your supplier to your warehouse, including the unit purchase price, international shipping, import duty, packaging and currency conversion. For Shopify brands importing from China, landed cost is often 30–50% higher than the factory price alone. Calculating margin against the factory price rather than the landed cost is one of the most common ecommerce accounting mistakes — it makes products look far more profitable than they are.
Break-even units per month = monthly fixed costs ÷ net profit per unit. For example, if your fixed monthly costs (rent, salaries, software) are £10,000 and your net profit per unit sold is £5, you need to sell 2,000 units per month to break even. This calculator estimates break-even using your fixed costs if provided, or shows the per-unit metrics so you can apply them to your own fixed cost base.
Yes, absolutely. Platform fees (Shopify subscription, Shopify Payments or PayPal at 2.9% + 30p per transaction) and fulfilment costs significantly erode margins and are frequently left out of product-level calculations. For a product selling at £50 on Shopify Payments, you're paying roughly £1.75 in processing fees alone — that's 3.5% of revenue before you've covered a single other cost. Always include these in your net margin calculation.
Related tools and guides
Know your real margins on every product
Canopy connects to Shopify and shows your true margin per SKU — including landed costs, marketing spend and fees — updated every day.