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Shopify Profit Margin Calculator

Product cost is only the beginning. This calculator adds payment processing and your plan's transaction fee, so the margin you see is the margin that actually reaches your bank account.

How the math works

Where a Shopify order's money goes

A Shopify order loses money to fees in two separate places, and confusing them is the most common pricing mistake. Payment processing (card rates, 2.9% / 2.7% / 2.5% + $0.30 in the US by plan) is charged on every transaction by your payment provider. The plan transaction fee (2% / 1% / 0.5% depending on plan) is only charged when you don't use Shopify Payments — for example when PayPal or a regional gateway processes the order.

Profit per order

profit = price − processing − transaction_fee − product_cost − shipping − ad_spend

Break-even price

Both processing and transaction fees scale with price, so break-even divides fixed costs by the fee-free share of each dollar:

break-even price = (product_cost + shipping + ad_spend + fixed_fee) ÷ (1 − (proc% + txn%) / 100)

Margin vs. markup

Margin divides profit by price — what share of revenue you keep. Markup divides profit by cost — how much you add on top of what you paid. A 50% margin equals a 100% markup; knowing which one a rule-of-thumb refers to prevents quiet pricing disasters.

Questions

Shopify calculator FAQ

How do I calculate profit margin on Shopify?

Profit margin = (price − all costs) ÷ price. All costs include product cost, shipping you pay, payment processing (2.9% + $0.30 on Basic, 2.7% on Grow, 2.5% on Advanced for US online sales), your plan transaction fee if you do not use Shopify Payments, and any ad spend you attribute per order.

Do I pay transaction fees if I use Shopify Payments?

No. If you use Shopify Payments in a supported country, the additional transaction fee for your plan (2% on Basic, 1% on Grow, 0.5% on Advanced) is waived — you only pay card processing rates. Using a third-party gateway like PayPal for all orders keeps the extra fee.

What is a good profit margin for a Shopify store?

Net margins vary widely by niche, but healthy Shopify stores typically target 20–40% gross margin after product cost and shipping, and 10–20% net after ads and fees. Paid acquisition eats margin fast — model ad cost per order before scaling spend.

What is the difference between margin and markup?

Margin is profit as a share of the selling price; markup is profit as a share of your cost. A $50 product sold for $100 has a 50% margin but a 100% markup. Shopify reports margin — most pricing rules of thumb reference markup.

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