Profit and margins for online stores

Ecommerce profit margins are where most stores' real story is told. Revenue is the number on the dashboard, but it's profit that pays the bills, and the gap between the two is wider than it looks: product costs, shipping, payment fees, discounts, returns and ad spend all come out before anything is left.

These guides walk through that gap one layer at a time. Start with gross margin, which shows what each sale leaves after the cost of the goods, then work down through operating profit and net profit to see what the business actually keeps. Along the way you'll find how to price from a target margin rather than a markup, what belongs in COGS, and how average order value, free shipping thresholds, bundles and discount codes change the math.

Every formula comes with a worked example in dollars, and most guides link to a free calculator so you can plug in your own store's numbers.

A note on margins you see quoted online: they vary a lot by category and business model. A healthy margin for a print-on-demand store looks very different from one for a brand that manufactures its own products, so the guides focus on how to work out your numbers rather than chasing a universal benchmark.