How do I calculate ecommerce profit?

Steps

1. Write the formula down

   If a cost is missing from the formula, it will be missing from the decision.

2. Land the product cost

   Supplier + freight + duty + packaging.

3. Add the channel’s tax on selling

   Marketplace commission or payment processing.

4. Add getting the order

   Ads, influencers, discounts.

5. Subtract and sanity-check cash

   If the calculator says $8 profit but your bank never sees it, you omitted a line.

The unit formula, then the shop

Profit = Selling price − landed product cost − selling fees − fulfillment/shipping − advertising − returns allowance − other variable costs. Do this per SKU first, then roll up. Shop profit also subtracts rent, salaries and software—do not mix those into every SKU unless you want fully loaded cost. Write the formula down so missing costs cannot hide. Landed cost is supplier + freight + duty + packaging. Channel tax is commission or payment processing. Getting the order is ads, influencers and discounts. If the calculator says $8 and the bank never sees it, a line was omitted. CrossKit Profit Calculator implements this in the browser; Currency Converter sits next to it for FX.

How often to recalculate

When price, ads, freight or fees change—and at least when you reorder. Cross-border SKUs need a dated FX rate, not last year’s memory. Revenue alone is not success; busy unprofitable shops still die. The $15 left on a $50 item must also fund mistakes, samples and slow movers. If those are heavy, raise the sticker price; do not decorate the spreadsheet.

How CrossKit fits this job

CrossKit Profit Calculator is the browser place to run the unit formula. Enter every variable line you would otherwise forget. Currency Converter belongs in the same tab for cross-border SKUs. Recalculate when you reorder. The output is contribution profit unless you also spread overhead. Restock from that number, not from revenue alone.

Example

$50 item. Landed $16. Fees $7.50. Shipping $4. Ads $6. Returns $1.50. Profit = 50 − 16 − 7.50 − 4 − 6 − 1.50 = $15. That $15 must also fund mistakes, samples and slow movers. If those are heavy, you need a higher sticker price—not a prettier spreadsheet. Keep fee-only leftover and after-ad profit as two rows. Restock decisions should use the second row.

Common mistakes

• Using revenue as a success metric only

  Busy unprofitable shops still die.

• Forgetting FX on cross-border SKUs

  Convert with a real rate, not last year’s memory.

• Hiding discounts in “marketing” so the SKU still looks premium

  If customers pay $42, the model’s price is $42. Marketing can explain why; it cannot change the arithmetic.