Profit Margin Calculator
Calculate your true profitability after all Shopify fees, and understand how payment processing impacts your bottom line.
Many merchants confuse gross margin with net margin—and that difference can mean the gap between profit and loss. This calculator shows you both, so you know exactly what you take home from each sale.
Calculator
Product Details
COGS per unit
Customer-facing price
Shopify Payments online credit card rate
Enter your product cost and selling price to calculate your margins
Understanding Margins
Margin vs Markup
These terms are often confused, but they measure different things:
Profit as a percentage of selling price
($30 profit ÷ $50 price) = 60% margin
Profit as a percentage of cost
($30 profit ÷ $20 cost) = 150% markup
Gross vs Net Margin
Gross margin shows profit before operating expenses—it's what you'd make if there were no fees, shipping, or overhead.
Net margin is what actually lands in your bank account after all deductions. For Shopify merchants, this includes:
- Payment processing fees (2.5-2.9% + $0.30)
- Shipping costs (if you cover them)
- Transaction fees (if not using Shopify Payments)
The gap between gross and net margin can be substantial—especially on lower-priced items where the fixed $0.30 fee takes a bigger bite.
Shopify Payment Processing Fees
Your Shopify plan determines your payment processing rate:
Last updated: January 2026 · View current Shopify pricing
| Plan | Online Rate | Monthly Cost |
|---|---|---|
| Basic | 2.9% + $0.30 | $19/month |
| Grow | 2.7% + $0.30 | $49/month |
| Advanced | 2.5% + $0.30 | $299/month |
The fixed fee matters more than you think. On a $10 product, the $0.30 fixed fee alone is 3% of revenue. On a $100 product, it's only 0.3%. This is one reason why increasing average order value is so powerful.
Improving Your Margins
Price strategically
- Test price increases of 5-10%—customers are often less price-sensitive than you think
- Use charm pricing ($49 vs $50) only when it makes sense for your brand
- Bundle products to increase AOV and dilute fixed fees
Reduce costs
- Negotiate better rates with suppliers as volume increases
- Consider domestic sourcing to reduce shipping time and costs
- Optimize packaging to reduce dimensional weight charges
Increase average order value
Higher AOV means fixed fees take a smaller percentage of each sale:
$0.30 fixed fee = 1.2% of order
$0.30 fixed fee = 0.4% of order
Progress bars, upsells, and bundles are proven ways to encourage larger orders while improving customer satisfaction.
Ready to Increase AOV?
BlueCart helps you visualize purchase incentives with beautiful progress bars that motivate customers to add more to their cart.