If you sell products online, your profit margin tells you how much of each sale you actually keep. It is one of the first numbers every store owner should understand, because it decides whether your store can survive discounts, ad spending, and slow months.
The formula is simple. Subtract your cost price and all fees from your selling price to get your profit, then divide that profit by your selling price and multiply by 100. For example, if a product costs you $30, you sell it for $80, and you pay $10 in fees and shipping, your profit is $40 and your margin is 50 percent.
Always include every cost: the product itself, packaging, shipping, marketplace fees, and payment processing. Many new sellers forget the small fees and end up with a margin that looks good on paper but disappears in real life.
Try different prices with our free Profit Margin Calculator to find a selling price that keeps your margin healthy. Most online stores aim for a margin between 20 and 40 percent after all costs.
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