How to calculate Shopify profit
Shopify net profit is your revenue minus every cost of running the store for the same period: product cost, shipping, payment fees, ads, and fixed costs like your plan and apps. It's the number that tells you whether the business is paying you, which revenue and gross profit can't.
The calculator uses this formula, monthly:
Net profit = revenue − product cost − shipping − payment fees − ad spend − fixed costs
Each cost comes from an input:
- Product cost = revenue × product cost %. This is what the goods cost you to make or buy.
- Shipping and fulfilment = orders × cost per order, including packaging and pick-and-pack.
- Payment fees = (revenue × fee rate) + (orders × fixed fee per order).
- Ad spend is your total paid media for the month across every platform.
- Fixed costs cover your Shopify plan, apps, tools and anything else that doesn't change with order volume.
Then it shows net margin (net profit ÷ revenue × 100) and profit per order (net profit ÷ orders).
About the default fees: the 2.9% rate and $0.30 fixed fee are example values only. Payment rates vary by Shopify plan, country and payment method. Check the rate for your Shopify plan and country, and enter what your own statements show.
Worked example
These are the calculator's default inputs for one month. The fee inputs are examples, not quoted rates.
| Line | Calculation | Amount |
|---|---|---|
| Revenue | $50,000 | |
| Product cost | $50,000 × 30% | −$15,000 |
| Shipping and fulfilment | 800 orders × $9 | −$7,200 |
| Payment fees, percentage | $50,000 × 2.9% (example) | −$1,450 |
| Payment fees, fixed | 800 orders × $0.30 (example) | −$240 |
| Ad spend | −$12,000 | |
| Apps, Shopify plan and other | −$2,500 | |
| Net profit | $11,610 | |
| Net margin | $11,610 ÷ $50,000 | 23.2% |
| Profit per order | $11,610 ÷ 800 | $14.51 |
Out of $50,000 in sales, the store keeps $11,610. Ads and product cost take the biggest bites here, so they're where the first gains are.
Net profit vs gross profit vs contribution margin
These three numbers sit at different points on the way from revenue to profit. Each answers a different question, and mixing them up is how stores end up surprised by their bank balance.
Using the worked example:
| Measure | What it subtracts | Amount | Share of revenue |
|---|---|---|---|
| Gross profit | Product cost only | $35,000 | 70% |
| Contribution margin | Product, shipping, payment fees | $26,110 | 52.2% |
| Contribution after ads | Above, plus ad spend | $14,110 | 28.2% |
| Net profit | Everything, including fixed costs | $11,610 | 23.2% |
Gross profit tells you whether your pricing works at the product level. The gross margin calculator handles that. Contribution margin tells you what each order adds before ads and overheads, which is the number to set ad targets on. Use the contribution margin calculator to work it out per order. Net profit is what the business keeps.
Our guide to contribution margin in ecommerce explains why it's the most useful of the three for day-to-day decisions.
How to read your result
Read your net profit against your own previous months, and against the effort and capital the store takes. There's no universal "good" margin worth aiming at. What matters is the trend and where the money goes.
Decision rules from your own numbers:
- Net profit negative: check contribution after ads first. If that's negative too, the ads cost more than the orders contribute. If it's positive, fixed costs are too high for current volume.
- Profit per order low but positive: small per-order gains disappear quickly under a returns spike or a shipping rate change. Raising average order value or margin gives you room.
- Revenue rising, profit flat: extra sales are coming in at a lower margin, usually through heavier discounts or less efficient ads. Compare month by month line by line.
What moves Shopify profit
Every line in the table is a lever. These are the ones that tend to matter most.
- Average order value. More revenue per order spreads shipping, fixed fees and ad cost across a bigger basket. Our Invisible Second Sale work targets this directly.
- Ad efficiency. Judge campaigns on profit after ads, not revenue. The ROAS calculator shows both.
- Pricing and discounts. A small price change moves margin on every order. Our guide to ecommerce pricing strategy covers how to test it.
- Fulfilment cost. Packaging, carrier rates and free-shipping thresholds all add up per order.
- Fixed costs. Apps pile up. Review subscriptions every quarter and cancel what nobody uses.
For a wider view of where profit comes from, read ecommerce profitability.
Common mistakes
- Treating Shopify gross profit as profit. It leaves out ads, shipping, fees and apps.
- Using someone else's payment rate. Fees depend on your plan, country and payment methods. Take yours from your own statements.
- Forgetting refunds and returns. Use net revenue after refunds, or profit will look better than it is.
- Mixing time periods. Monthly revenue against a quarterly ad bill gives a meaningless answer.
- Leaving out your own pay. If the founder works full-time unpaid, net profit overstates what the business really earns.
If the numbers don't add up the way you expected, a teardown or a game plan shows where to start.