Enter your numbers for a specific period, such as the previous month or year. It doesn’t matter which period you choose, as long as all the numbers you enter are from the same period.
Enter your revenue and costs for the same period, such as a month, quarter or full year. The period itself doesn’t matter, as long as every number covers the same period.
Start with your revenue, number of orders, ad spend, product costs, shipping and fulfillment costs, and payment and platform fees. For a more accurate result, you can also add refunds, other variable costs and fixed operating costs.
The calculator will show your net profit and net profit margin, together with useful business metrics such as ROAS, CPA, average order value, profit per order and break-even ad spend.
The more complete your cost data is, the more accurately the result reflects what your business actually earned.
Profit margin shows how much of your revenue remains as profit after costs. It is usually expressed as a percentage.
For example, if a business generates $100,000 in net revenue and makes $10,000 in profit, its profit margin is 10%.
There are different ways to measure profit margin. Gross profit margin considers mainly revenue and the direct cost of the products or services sold. Net profit margin goes further by taking other business expenses into account.
This calculator focuses on net profit margin, allowing you to include advertising, shipping, payment fees, refunds, fixed costs and other expenses that can have a significant effect on your actual profitability.
The basic net profit calculation is:
Net profit = Net revenue − Total costs
Net profit margin is then calculated as:
Net profit margin (%) = Net profit ÷ Net revenue × 100
For example, if your net revenue is $50,000 and your total costs are $42,500:
Net profit = $50,000 − $42,500 = $7,500
Net profit margin = $7,500 ÷ $50,000 × 100 = 15%
A 15% net profit margin means that the business keeps $15 in profit for every $100 of net revenue after the costs included in the calculation.
Want to understand the calculation in more detail? Read our guide on how to calculate profit margin.
The answer depends on what type of profit margin you want to calculate. If you want to understand the actual profitability of your business, you should account for more than just the cost of the products you sell.
Depending on your business, relevant costs can include:
Leaving out significant expenses can make your profit margin look considerably better than it really is. For the most realistic result, include all relevant revenue and costs from the period you are calculating.
Let Kiito calculate your profit margin and other key business metrics automatically, every single day.
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Read more about KiitoThere is no single profit margin that is considered good for every business. Typical margins vary considerably depending on the industry, business model, pricing, operating costs and stage of the business.
The most useful comparison is often your own profit margin over time. An improving margin means that a larger share of your revenue is being retained as profit.
Gross profit margin measures how much revenue remains after the direct cost of the products or services sold.
Net profit margin takes a broader view and accounts for additional expenses such as advertising, shipping, payment fees, operating expenses and other costs.
A business can therefore have a strong gross margin while still making little or no net profit.
No. Profit margin and markup compare profit to different numbers.
Profit margin compares profit with the selling price or revenue.
Markup compares profit with the cost of the product.
For example, a product that costs $50 and sells for $100 has a 100% markup, but a 50% gross profit margin.
Yes. A negative profit margin means your costs were higher than your revenue during the period being calculated.
For example, if a business has $100,000 in net revenue and $105,000 in total costs, its net profit is −$5,000 and its net profit margin is −5%.
Advertising costs should normally be included when calculating net profitability.
This is particularly important for ecommerce businesses, where customer acquisition costs can represent a significant share of revenue. A product or campaign can have a healthy gross margin but still be unprofitable after advertising and other expenses are included.