Ecommerce Profit Margin Calculator for Australia
Work out the real profit on each order after GST, shipping, packaging, marketplace and payment fees, ad spend and discounts. See your margin, markup, break-even price and the price you need to hit a target margin.
What This Profit Margin Calculator Measures
The calculator takes one order, removes GST where it applies, subtracts every variable cost involved in making that sale, and shows what is left as net profit, margin and markup. It then works backwards to give your break-even price, the price needed for your target margin and how much you can spend on ads before an order stops being profitable.
Many store owners judge a product by the gap between the supplier price and the shelf price. That gap is only gross profit. By the time a parcel reaches the customer, there are delivery charges, boxes and satchels, a marketplace commission, card fees and the advertising that brought the buyer in. On some products those costs take most of the gap, and a product that looks healthy can lose money on every order.
Working per order keeps things concrete. Once you know the true profit on a single sale, you can see which products deserve more ad budget, which need a price rise, and which are worth dropping.
How Each Result Is Calculated
All results are per order. When you choose a GST-registered option with amounts including GST, each amount is divided by 1.1 to remove GST before profit is calculated.
| Result | Formula |
|---|---|
| Sale price after discount | Selling price × (1 − discount %) |
| Net revenue | Sale price after discount, excluding GST |
| Fees | Sale price × (marketplace % + payment %) + fixed payment fee |
| Total cost | Product + shipping + packaging + other + advertising + fees |
| Gross profit | Net revenue − product cost |
| Net profit | Net revenue − total cost |
| Profit margin | Net profit ÷ net revenue |
| Markup on product cost | Gross profit ÷ product cost |
| Break-even price | Fixed costs per order ÷ ((1 − discount) × (1 − fee %)) |
| Price for target margin | Fixed costs per order ÷ (1 − fee % − target margin) ÷ (1 − discount) |
| Maximum ad spend | Net profit + current ad cost per order |
Here, fixed costs per order means the dollar amounts that do not change with price: product cost, shipping, packaging, other costs, advertising and the fixed payment fee. Because percentage fees rise with the price, the break-even and target prices account for them rather than simply adding them on.
A Worked Example
Imagine a GST-registered store selling a product for $59.95 including GST, with a 10% discount code, an $18 product cost, $9.50 shipping, $1.20 packaging, a 1.75% plus 30 cent payment fee, $8 of ads per order and no marketplace fee. All costs include GST.
After the discount the customer pays $53.96. Removing GST leaves about $49.05 of net revenue. The product cost is about $16.36 ex GST, so gross profit is roughly $32.69 and looks comfortable. Once shipping, packaging, ads and fees are taken off, net profit falls to roughly $14.56, a margin of about 29.7%. The break-even price is about $41.84 including GST, which is the floor before every sale loses money. Enter the same numbers above to see the full breakdown.
Example figures are illustrative only. Use your own supplier invoices, carrier rates and platform fee schedules for real decisions.
Handling GST Correctly
For a GST-registered business, the 10% GST included in your sale price is collected on behalf of the ATO. Counting it as revenue makes every margin look about 9% better than it is. On the other side, GST on most business purchases can be claimed back as input tax credits, so the real cost is the GST-exclusive amount.
When costs have no GST
Not every cost includes GST. Some imported goods, overseas software and certain advertising charges may have no Australian GST, or be handled under the reverse charge rules. If a large cost has no GST, choose the option for amounts excluding GST and enter that cost at its actual amount, or ask your accountant how it is treated.
If you are not registered
Businesses under the registration threshold that have not registered do not charge GST and cannot claim credits. Choose the not registered option and enter what you actually pay. The ATO website has the current threshold and rules, and an accountant can confirm your situation.
Turning the Numbers Into Better Decisions
- Below break-even? Raise the price, reduce shipping costs, bundle products to spread delivery across more items, or stop advertising that product.
- Margin below target? Compare the price needed for your target with competitor prices. If it is too high to sell, the product may suit a different channel.
- Ads eating the profit? The maximum ad spend figure is your ceiling, not your goal. Leave room for returns, overheads and profit.
- Discounts adding up? Test the same product with and without a discount code to see how much a sitewide sale really costs.
Product pages that convert better also lower your ad cost per order. Our ecommerce SEO services help stores win more organic sales, which carry no per-click cost.
Frequently Asked Questions
What is the difference between margin and markup?
Margin is profit as a share of the selling price (net revenue). Markup is profit as a share of the cost. A product that costs $50 and sells for $100 ex GST has a 50% gross margin but a 100% markup. Mixing them up is one of the most common pricing mistakes.
Should I include GST in my profit calculations?
If you are registered for GST, no. The GST you collect belongs to the ATO, and the GST on most business costs can be claimed back as credits, so profit is best measured on GST-exclusive amounts. The calculator does this for you when you pick a GST-registered option. If you are not registered, GST you pay on costs is a real cost and is included as entered.
What is a good profit margin for an online store?
There is no single right number. It depends on your category, how much you spend on ads, whether you sell through marketplaces and your fixed overheads such as rent, wages and software. The useful question is whether your net margin per order covers those overheads and leaves the profit you want. Set a target margin in the calculator to see the price that achieves it.
Why is my break-even price higher than my product cost?
Because every order carries more than the product cost. Shipping, packaging, platform commission, payment fees and the ad spend needed to win the sale all have to be covered, and percentage fees grow as the price grows. The break-even price is the selling price at which all of those costs are exactly covered.
How do I work out advertising cost per order?
Divide your total ad spend for a period by the number of orders those ads produced. For example, $2,000 of ad spend that brought in 250 orders is $8 per order. If you only know return on ad spend (ROAS), divide your average order value by ROAS.
Does this include fixed costs like rent and wages?
No. It works per order using variable costs, the costs that rise with each sale. Fixed overheads are covered by the total net profit from all orders. To check them, multiply net profit per order by your monthly orders and compare it with your monthly overheads.
Can I use this for Shopify, Amazon or eBay?
Yes. Enter your plan or marketplace commission as the platform fee and your payment gateway rate and fixed fee separately. Fee schedules change and vary by category, so check the current rates in your own account rather than relying on a general figure.
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