Most margin calculators subtract the product cost and stop. This one subtracts the payment fee, the shipping you absorb and the ad spend that won the order, because those are the costs that decide whether a sale actually made money.
What this calculator cannot do. It works from numbers you type in, so it is only as accurate as your estimates. Real orders vary: a currency conversion, a refund or a chargeback changes the fee on an individual sale, and the deposit that reaches your bank is rarely the number Shopify reported.
That is the gap Margio closes. It reads your real orders, the actual fee on each one and your connected ad spend, then confirms the total against the money that actually landed in your bank.
See how Margio worksProfit margin is profit divided by revenue, shown as a percentage. Subtract every cost of the sale from the selling price to get the profit, then divide by the selling price and multiply by 100. On a $40 order with $21.46 of costs, the profit is $18.54 and the margin is 46.4 percent.
The part people get wrong is which costs to include. Leave out the payment fee and the ad spend and you are calculating gross margin, which flatters the number. Include every cost that moves with the order and you get contribution margin, which is the figure that tells you whether the sale was worth making.
Gross margin subtracts only the cost of goods. Contribution margin subtracts every variable cost, including fees, shipping and ad spend. Net profit subtracts fixed costs too, such as your Shopify subscription and salaries. The three answer progressively harder questions about the same sale.
| Measure | Subtracts | Answers |
|---|---|---|
| Gross margin | Cost of goods only | Is the product priced well? |
| Contribution margin | All variable costs | Is this sale worth making? |
| Net profit | Everything, fixed costs included | Is the business making money? |
Break even ROAS is the return an advertised sale must achieve just to pay for itself. It is one divided by the margin available before ad spend. If your margin before advertising is 40 percent, break even ROAS is 2.5, so every advertising dollar has to bring back at least $2.50 in sales before the ad makes any money.
The calculator works it out from the costs you entered, so it moves when your product cost or fees move. That is more useful than a generic benchmark: a ROAS of 3 is profitable for one store and a loss for another, and the only way to know which is to compare it to your own break even.
Subtract every cost of the sale from the selling price, then divide by the selling price. For a true margin include the product cost, the Shopify payment fee of 2.9% plus 30 cents on a standard US online sale, any shipping you absorb, and the ad spend that won the order. Multiply by 100 for a percentage.
Many ecommerce stores aim for a contribution margin of 30 to 40 percent or higher, because fixed costs and advertising still come out of it. The honest benchmark is your own break even point: a margin that comfortably covers your monthly fixed costs at your current order volume is a good margin for you.
Yes. The payment processing fee defaults to 2.9% plus 30 cents, Shopify's standard rate for an online card sale on the Basic plan in the US. Both parts are editable, so you can set your own rate if you are on a different plan, in a different country, or using a third party gateway.
Margin is profit as a percentage of the selling price. Markup is profit as a percentage of the cost. A product costing $15 and selling for $40 has a 62.5 percent gross margin but a 166.7 percent markup. They describe the same $25 of profit against different bases, which is why they are so easily confused.