FAQ & Help Centre
Everything you need to know about calculating real ecommerce profit — from VAT and payment fees to ROAS and breakeven points.
Why accurate profit calculation matters for ecommerce
Most ecommerce sellers underestimate their true costs. Payment processing fees, VAT, shipping, and platform charges all eat into your margin before you see a penny. ProfitGenie strips all of that away to show you your real profit on every sale.
VAT collected is not your income — it belongs to the tax authority. Always remove it before calculating margin.
Shopify Payments charges 2.9% + $0.30 per transaction. On a $20 sale, that's over 4% of your revenue gone before costs.
A healthy ecommerce profit margin is typically 15–30%. Below 10%, small cost changes can quickly turn profitable products into loss-makers.
Shopify Payments charges a percentage fee plus a fixed amount per transaction (e.g. 2.9% + $0.30). On lower-priced items the fixed fee has an outsized impact. Enter both values in ProfitGenie to see your accurate net profit.
No. VAT and sales tax is collected on behalf of the tax authority and must be remitted. ProfitGenie separates it from your revenue before calculating margin so you always see your true income.
For physical product ecommerce, margins of 15–30% are common. Digital products and POD can achieve higher margins. Below 10%, the business is vulnerable to small cost increases or returns.
Yes. Enter your payment gateway fee (e.g. Stripe 2.9% + $0.30), product cost, shipping cost, and VAT rate. ProfitGenie works for any ecommerce platform.
How to price products correctly for ecommerce
Guessing at a selling price is one of the most common mistakes new ecommerce sellers make. Too low and you're working for nothing; too high and you lose sales. The Price Finder calculator works backwards from your target margin to give you the exact price to charge.
Your selling price must cover product cost, shipping, payment fees, VAT, and still leave your target margin — in that order.
Etsy charges a 6.5% transaction fee plus listing fees. Factor these in as your payment fee percentage to get an accurate price.
For POD stores, include the base product cost from your supplier as your product cost and let ProfitGenie calculate the minimum viable price.
Enter your product cost, Etsy transaction fee (6.5%), any shipping cost, and your target profit margin. ProfitGenie will calculate the minimum selling price you need to charge, including VAT if applicable.
Add your cost of goods, Shopify Payments fee (2.9% + $0.30), shipping cost, and desired margin percentage. The Price Finder will show the exact selling price to reach that margin after all deductions.
If you are VAT-registered and selling to consumers, your price typically includes VAT. Toggle the VAT setting to "includes" and enter your VAT rate — ProfitGenie will calculate your net revenue correctly.
Use your POD base cost as the product cost, add the platform transaction fee percentage, and set a target margin of at least 20–30% to account for occasional returns and platform fee changes.
How shipping costs quietly reduce ecommerce profit
Shipping is one of the biggest hidden profit killers in ecommerce. Free shipping offers, undercharging, and fluctuating carrier rates can turn a profitable product into a loss with no obvious warning. The Shipping Impact calculator shows exactly how much each order's shipping costs you in real margin terms.
Offering free shipping typically increases conversion rates but transfers the entire shipping cost directly to your margin.
If you charge $4.99 shipping but your carrier charges $6.50, you're absorbing $1.51 per order — invisible unless you track it.
For high-volume sellers, even a $0.50 shipping shortfall per order adds up to thousands in lost profit annually.
It depends on your margin. Free shipping increases conversions but the cost comes directly from your profit. Use the Shipping Impact calculator to see whether your current margin can absorb free shipping or whether you need to adjust your pricing.
Enter your selling price, product cost, actual carrier shipping cost, and the shipping amount you charge the customer. ProfitGenie will show you your shipping recovery rate and the net impact on your profit margin.
Payment fees are calculated on the total order value including shipping, and VAT may apply to the shipping charge. This means the cost of shipping has a compounding effect that is easy to underestimate.
Ideally, charge enough to cover your actual carrier cost. If your margin supports it, offering flat-rate or free shipping on orders above a threshold can improve average order value while protecting profit on smaller orders.
How discounts affect ecommerce margins and profit
Running a sale feels good — until you see the numbers. Discounts reduce revenue immediately but leave all your costs unchanged. A 20% discount on a product with a 25% margin can eliminate profit entirely. The Discount Impact calculator shows exactly what a promotion will cost you and how many extra sales you'd need to break even.
A 10% discount on a 20% margin product reduces that margin by 50% — not 10%.
The "extra sales needed" figure shows how many more units you must sell post-discount to earn the same profit as before.
Seasonal discounting on Etsy and Shopify can drive volume, but only if your margin can absorb the reduction.
It depends on your margin. If your margin is 25%, a 20% discount reduces your net profit by roughly 80%. Use the Discount Impact calculator to see the exact impact based on your real costs.
The extra sales needed depends on the ratio of your pre- and post-discount profit. A steep discount on a thin margin may require 3–5× the normal sales volume just to break even — ProfitGenie calculates this precisely.
They can be, if your base margin is healthy enough to absorb the discount. Run your numbers through the Discount Impact calculator before activating a sale to see whether the promotion is financially viable.
As a general rule, your margin after discount should remain above 10% to stay financially sustainable. Below that, each sale generates very little profit and any cost increase could result in losses.
How to calculate breakeven sales for your online store
Knowing your breakeven point is essential for any ecommerce business. It tells you the minimum number of sales required each month to cover all your costs before making any profit. The Breakeven Calculator splits your costs into per-sale variable costs and fixed monthly overheads, giving you a clear and accurate target.
Fixed monthly costs — like platform subscriptions, tools, and software — must be covered before you earn a single penny of profit.
The lower your profit per sale, the more sales you need to break even. Improving your margin reduces your breakeven point dramatically.
For Shopify and Etsy sellers, monthly plan fees, transaction fees, and advertising costs are all fixed overheads that belong in your breakeven calculation.
Add up all your monthly fixed costs (Shopify plan, apps, storage, etc.), then calculate your profit per sale after deducting product cost, shipping, and payment fees. Divide fixed costs by profit per sale to get your monthly breakeven sales number.
Fixed costs are expenses that stay the same regardless of how many sales you make — platform subscriptions, marketing tools, design software, storage fees, and any monthly service charges. Product costs and payment fees are variable (they change per sale).
If your selling price does not cover your per-sale costs (product, shipping, payment fees), you are making a loss on every order. No number of sales will make the business profitable — you need to raise your price or reduce costs before calculating a meaningful breakeven point.
The Breakeven Calculator shows your daily sales needed figure automatically. It divides your monthly breakeven sales by 30 to give you a daily target, which is useful for planning listing schedules and ad spend.
What is ROAS and how do ecommerce sellers use it?
ROAS (Return on Ad Spend) measures how much revenue you earn for every pound or dollar spent on advertising. While ROAS is widely used, it only tells part of the story — a high ROAS does not guarantee profit if your product costs, fees, and VAT are not accounted for first.
Break-even ROAS is the minimum ROAS you need before your ads stop losing money. Anything below this and your ad spend exceeds your available profit.
Target ROAS goes further — it is the ROAS needed to hit your desired profit per sale after advertising costs are deducted.
VAT and payment fees are deducted before profit is calculated, so the revenue available to cover ad spend is always less than the selling price.
A good ROAS depends entirely on your product margins. A 4x ROAS might be highly profitable for one seller and loss-making for another. Use ProfitGenie to calculate your break-even ROAS first, then target a ROAS that delivers your desired profit.
Break-even ROAS is your selling price divided by your maximum ad spend to break even. Your maximum ad spend to break even is your net revenue minus all non-ad costs (product, shipping, fees, VAT). If this figure is zero or negative, your price does not cover costs before advertising.
VAT collected is not revenue — it must be remitted to the tax authority. ProfitGenie removes VAT from your net revenue before calculating profitability, so your ROAS targets are based on money you actually keep.
ROAS only measures revenue relative to ad spend. If your product cost, shipping, payment fees, and VAT together exceed your net revenue after ad spend, you will show a positive ROAS but still make a loss. Always check profit after ads, not just ROAS.