Formula
Profit = Revenue − COGS − Ad spend − Fees − Shipping − Other costsDirect answer
This calculator subtracts product cost, advertising, fees, shipping and other entered costs from store revenue. The example inputs produce $25,000 profit on $100,000 revenue, a 25% margin.
The result is a planning profit view, not a standardized accounting statement. Its meaning depends on which costs are included and whether revenue is entered consistently.
Read the four outputs
| Output | Example result | Use |
|---|---|---|
| Estimated profit | $25,000 | Amount left after all entered costs |
| Profit margin | 25% | Profit relative to revenue |
| Total entered costs | $75,000 | Combined cost base used by the model |
| Cost share of revenue | 75% | Share of revenue consumed by entered costs |
Profit and margin answer different planning questions. Profit shows economic scale, while margin makes periods or product groups easier to compare.
Worked store example
Assume an online store reports the following monthly totals:
| Line | Amount |
|---|---|
| Net revenue | $100,000 |
| Cost of goods | $35,000 |
| Advertising | $18,000 |
| Platform and payment fees | $5,000 |
| Shipping and fulfillment | $7,000 |
| Other operating costs | $10,000 |
Total entered costs are $35,000 + $18,000 + $5,000 + $7,000 + $10,000 = $75,000.
Estimated profit is $100,000 - $75,000 = $25,000. Profit margin is $25,000 ÷ $100,000 × 100 = 25%.
Define revenue before comparing periods
Use revenue net of refunds and discounts. Include payment processing, marketplace commissions and fulfillment where applicable. Otherwise, the result can substantially overstate profitability.
If one period uses gross order value before refunds and another uses net sales after refunds, the resulting margin comparison is not reliable. Taxes collected for a government are generally not operating revenue, but the correct treatment depends on the accounting context and jurisdiction.
Diagnose the result by cost layer
When profit is weaker than expected, changing every input at once hides the cause. Review the cost layers in order:
- Reconcile orders, refunds, discounts and recognized revenue.
- Check product cost and product mix.
- Separate shipping charged to customers from fulfillment paid by the store.
- Reconcile platform, marketplace and payment fees.
- Compare advertising with contribution available before advertising.
- Confirm what payroll, software, rent and other overhead are included.
For order-level decisions, use a consistent contribution definition in the E-commerce Unit Economics guide. For pricing work, compare profit margin with markup rather than treating them as interchangeable.
Scenario comparison
The same revenue can produce different outcomes when one cost layer moves:
| Scenario | Revenue | Total costs | Profit | Margin |
|---|---|---|---|---|
| Base case | $100,000 | $75,000 | $25,000 | 25% |
| Higher ad spend | $100,000 | $82,000 | $18,000 | 18% |
| More refunds and lower net revenue | $92,000 | $75,000 | $17,000 | 18.48% |
| Higher fulfillment cost | $100,000 | $80,000 | $20,000 | 20% |
These are arithmetic scenarios, not forecasts. Real cost relationships may change with order volume.
Common mistakes
- Entering gross sales while omitting refunds and discounts.
- Omitting transaction fees or shipping subsidies.
- Comparing months that use different cost scopes.
- Treating inventory purchases as identical to cost of goods sold without accounting review.
- Calling the estimate net profit when taxes, interest or other required costs are absent.
What remains outside the model
Taxes, depreciation, financing, inventory timing and owner compensation are included only if placed in other costs. The calculator does not apply accounting standards or tax rules. Use reviewed financial statements for formal reporting.
Assumptions
- Revenue is net of refunds and discounts.
- Taxes and owner compensation are included only if entered under other costs.
Sources and methodology
CalcMotive publishes the formula and assumptions so you can decide whether the estimate fits your use case. See our methodology standards.
- Shopify: gross, operating and net profit margins; Shopify; accessed Jul 13, 2026
- OpenStax: contribution margin and variable costs; OpenStax; accessed Jul 13, 2026