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Shopify profit margin: how to calculate it for your store

Checked against the live sources below on 27 October 2026.

Profit margin is profit divided by price, where profit is what is left after product cost, shipping, payment fees and ad spend per order. Markup is different: profit divided by product cost. Work out profit per order first, then use the free margin calculator to see both.

The formula

Per order: price − product cost − shipping you pay − payment fees − ad spend = profit. Margin = profit ÷ price. Markup = (price − product cost) ÷ product cost. A 100% markup is a 50% margin before other costs, so never mix the two when you compare numbers.

Two views are useful. Contribution per order is what is left after product, shipping and fees, before ads; it tells you how much you can spend on ads and still not lose money. Profit per order is what remains after ads. Look at both.

An example with invented numbers

A $40 order with $15 of product, $5 of shipping and $4 of advertising. Shopify’s pricing page lists 2.9% + 30¢ as the online card rate on Basic, so card fees are $1.16 + $0.30 = $1.46. Profit is $40 − $15 − $5 − $4 − $1.46 = $14.54, a margin of about 36%. Markup on the same sale, measured against the $15 product cost alone, is 167%, which shows why mixing the two terms misleads.

Contribution before ads is $40 − $15 − $5 − $1.46 = $18.54, so spending more than that per order on ads loses money on every sale.

What is a normal margin?

We are not quoting a benchmark. Margins vary widely by what you sell, and we could not find a source that applies to your store. Compare your numbers against your own costs and your own goal instead.

From margin to break-even

Once you know profit per order, ask how many orders cover your fixed costs, such as your Shopify plan, apps and salaries. The break-even calculator shows the units and revenue you need each month.

If the number looks too high, you have three levers: raise the price, cut a variable cost such as shipping or fees, or cut a fixed cost. Change one at a time and rerun the numbers, so you can see which lever matters.

Two things people forget: returns and free shipping. If some orders come back, spread that cost across all orders, using your own return rate. If you offer free shipping, the cost sits in your numbers even though the customer sees nothing, so enter it as shipping you pay.

Put your own costs in and see margin, markup and break-even ad spend.

Profit margin calculator Break-even calculator

Frequently asked questions

What is the difference between margin and markup?

Margin divides profit by the selling price; markup divides it by the product cost. The same sale has a smaller margin than markup.

Should ad spend count in my margin?

Count it per order if you want to know what an order really earns. Without it, the number flatters you.

Do payment fees matter?

Yes. On Shopify’s pricing page the standard online card rate is between 2.25% and 2.9% plus 30¢, depending on plan.

How this page was researched

Read on 27 October 2026. The formulas are standard definitions; the example uses invented numbers and the Basic online card rate from Shopify’s pricing page. We omitted margin benchmarks because we could not source one.

Shopify pricing — plan prices, card rates, third-party transaction fees and the trial offer as quoted on this page

Disclosure. The calculator on this page is ours (Stelar Digital LLC) and free. This page was written with AI tooling and checked against the sources listed above.