If you're running an online store and wondering whether you're truly making a profit, an ecommerce profit calculator is your go-to tool. It helps you quickly determine if your pricing strategy covers all expenses and still leaves room for profit.
You might look at your sales dashboard and feel good about the revenue numbers climbing. But revenue isn't profit. Not even close. Between product costs, shipping fees, platform charges, advertising spend, payment processing fees, returns, and a dozen other expenses that chip away at every sale, what looked like a successful month can evaporate into barely breaking even or worse.
This isn't just about knowing whether you made money. It's about understanding where your money actually goes, which products genuinely contribute to your bottom line, and where you're quietly bleeding profit without realizing it.
An ecommerce profit calculator cuts through the confusion. It takes the messy reality of all those costs and gives you a clear answer: after everything is paid, what's actually left? That clarity changes everything about how you run your store.
What Is an Ecommerce Profit Calculator?
An ecommerce profit calculator is a tool, whether a simple online form, a spreadsheet template, or a software plugin, that helps you determine the actual profitability of your products and overall store by accounting for all the costs involved in making a sale.
Unlike a general profit calculator that might only subtract basic costs from revenue, an ecommerce specific calculator understands the unique expense structure of online retail. It knows about payment processing fees that take a percentage of every transaction. It accounts for shipping costs that vary by product and destination. It factors in marketplace fees if you sell on Amazon or eBay. It includes the advertising spend that drove the sale in the first place.
The calculator does the math you should be doing manually but probably aren't, at least not consistently or accurately. It forces you to confront every cost associated with a sale, even the ones that feel too small to matter individually but add up to thousands of dollars over a year.
Who uses these calculators? Smart store owners who want to make decisions based on reality rather than assumptions. New sellers trying to price products correctly from the start. Established businesses diagnosing why growth in sales hasn't translated to growth in profit. Anyone who's ever looked at their bank account and wondered where all the money went despite healthy looking sales figures.
The difference between an ecommerce profit calculator and a general business profit calculator lies in specificity. General calculators work in broad strokes. Ecommerce calculators understand that a $50 product sold through Facebook ads has a completely different profit profile than the same product sold organically through Google search. They account for the transaction fees Shopify charges, the PayPal processing costs, the packaging materials, the return rate for that specific product category.
This specificity matters because ecommerce margins are often thinner than people expect. A percentage point here or there, a cost you forgot to factor in, can be the difference between a sustainable business and one that works incredibly hard to lose money efficiently.
Why Every Online Store Needs One
You can't improve what you don't measure. That phrase has been repeated so often it feels like a cliché, but when it comes to ecommerce profitability, it's the uncomfortable truth most store owners learn the hard way.
Running an online store without regularly calculating profit is like driving cross country without checking your fuel gauge. You might make it. You might not. You definitely won't know you're in trouble until you're already stranded.
Here's what happens when you don't track profit accurately: You make pricing decisions based on gut feeling or what competitors charge rather than what your actual costs require. You pour money into advertising without knowing if the customers you acquire cost more than they're worth. You carry products that feel like bestsellers because they sell frequently, not realizing those frequent sales barely cover costs while slower selling items actually fund your business.
You invest in growth, more inventory, more ads, more everything, without realizing your unit economics don't support growth. Every additional sale loses money, so scaling just means losing money faster. It's surprisingly common and heartbreaking to watch.
The psychological trap is powerful. Sales create momentum and excitement. Seeing orders come in, inventory move, customers engage with your brand, it feels like success. Revenue graphs climbing upward look impressive. But if you're not calculating profit, you're performing a kind of theater, playing the role of successful business owner while the actual business quietly struggles.
A profit calculator forces honesty. It makes you confront whether what you're doing actually works. That honesty feels uncomfortable initially but becomes liberating. When you know your real numbers, you can make real decisions. You can identify which products to push and which to discontinue. You can set advertising budgets based on actual return rather than hope. You can price confidently because you know exactly what you need to charge.
Failing to track profit doesn't just hurt your business. It hurts you personally. Ecommerce sellers often work exhausting hours for what looks like impressive revenue, then can't figure out why there's no money to pay themselves. They feel like failures when the problem isn't their work ethic or business acumen. It's simply that they never did the math to ensure the economics worked.
A profit calculator also reveals opportunities you're missing. When you can see exactly where money goes, you can identify which costs to negotiate, which processes to optimize, which products to bundle for better margins. The problems become solvable instead of mysterious.
Every successful ecommerce business, from the solo entrepreneur to major brands, tracks profitability religiously. They might use sophisticated software or simple spreadsheets, but they all know their numbers. If you want your store to survive and eventually thrive, you need to know yours too.
How to Use an Ecommerce Profit Calculator (Step by Step)
Using a profit calculator isn't complicated, but it does require gathering accurate information. Here's how to do it properly.
Step 1: Gather Your Product Cost Data
Start with your cost of goods sold (COGS). This is what you pay to acquire or manufacture the product itself. For dropshippers, it's what your supplier charges. For manufacturers, it includes materials, labor, and production costs. For resellers, it's your wholesale cost.
Be precise here. Include any minimum order quantities that forced you to buy more than you needed. Factor in defective units or damaged goods. If you paid for product photography or samples, those costs should be distributed across the products they support.
Step 2: Calculate Shipping and Fulfillment Costs
What does it actually cost to get the product to your customer? This includes the shipping carrier's fee, packaging materials (boxes, bubble wrap, tape, branded inserts), and if you use a fulfillment service, their per order handling fee.
Many sellers underestimate packaging costs. That branded tissue paper, the thank you card, the eco friendly mailer, they're all costs. Track everything for a month if you're not sure. The real numbers are almost always higher than estimates.
Step 3: Input Transaction and Payment Processing Fees
Every payment method takes a cut. Credit card processors typically charge 2.9% plus 30 cents per transaction. PayPal has similar rates. If you sell on marketplaces like Amazon or Etsy, they take 15% to 40% depending on the category. Shopify charges a monthly fee plus transaction fees if you don't use Shopify Payments.
These percentages seem small until you do the math on hundreds or thousands of transactions. On a $50 sale, payment processing alone might cost $1.75 to $2.50. That's 3.5% to 5% of your revenue gone before you've shipped anything.
Step 4: Factor in Advertising and Marketing Costs
If you paid for the customer through ads, that cost needs to be included in profit calculations. Look at your total ad spend and divide by the number of orders attributable to those ads for an average customer acquisition cost.
This is where profit calculations get real. That product with a $30 margin looks great until you realize you spent $25 in Facebook ads to get the sale. Your actual profit just dropped to $5.
Not all sales involve direct ad costs. Organic traffic, email marketing to existing customers, and word of mouth don't carry acquisition costs for individual orders. But be honest about what portion of your sales required paid marketing.
Step 5: Include Platform and Subscription Fees
Your ecommerce platform charges monthly. Maybe you pay for email marketing software, inventory management tools, customer service apps. These are real costs that need to be factored in.
Take your total monthly software and subscription costs and divide by your average monthly orders to get a per order allocation. Yes, this is an estimate, but it's better than ignoring these costs entirely.
Step 6: Account for Returns and Refunds
Not every sale sticks. Some percentage of orders get returned or refunded. Look at your historical return rate and factor it in. If 5% of orders get returned, you're not actually keeping the revenue from 1 out of every 20 sales, and you're often eating the shipping cost both ways.
Step 7: Calculate Taxes
Sales tax collection, income tax, and any other applicable taxes reduce your actual take home profit. The calculator might not include this, but you should remember that even after calculating profit, a portion goes to taxes.
Step 8: Review Your Results
Now you have a number. Your actual profit per product or per order. It might be higher than expected. It might be depressingly lower. Either way, it's real, and you can work with real numbers in ways you can't work with guesses.
Run these calculations regularly, not once. Costs change. Shipping rates increase. Ad costs fluctuate. Your margins from six months ago might not reflect your margins today.
Key Metrics to Input and Track
Understanding the specific metrics involved in profit calculation helps you identify where to focus improvement efforts.
Cost of Goods Sold (COGS): The direct cost of the product you're selling. This is typically your largest expense and the foundation of all profit calculations. Lowering COGS through better supplier negotiations or order volume discounts directly increases profit.
Gross Profit: Revenue minus COGS. This tells you how much money you have left after paying for the product itself to cover all other expenses. A healthy gross profit margin for ecommerce typically ranges from 40% to 80% depending on your category and model.
Net Profit: What remains after ALL expenses. COGS, shipping, fees, advertising, salaries, rent, software, everything. This is your actual profit, the money you can reinvest or take home. Net profit margins in ecommerce often range from 5% to 20% for healthy businesses, though this varies significantly.
Profit Margin: Expressed as a percentage, this is profit divided by revenue. A 20% profit margin means that for every dollar of revenue, you keep 20 cents as profit. Tracking this percentage over time reveals whether your business is becoming more or less efficient.
Average Order Value (AOV): The average amount customers spend per transaction. Increasing AOV through bundles, upsells, or minimum order thresholds can dramatically improve profitability because many costs (payment processing, fulfillment labor) are per order rather than per dollar sold.
Customer Acquisition Cost (CAC): How much you spend on average to acquire a new customer through marketing and advertising. If your CAC is $40 but your average order profit is $30, you're losing money on first purchases and depending entirely on repeat purchases to become profitable.
Customer Lifetime Value (CLV): The total profit you expect from a customer over their entire relationship with your store. This needs to exceed CAC, ideally by 3x or more, for your customer acquisition to be sustainable.
Return Rate: The percentage of orders that get returned or refunded. High return rates destroy profitability because you typically lose the payment processing fee, both shipping costs, and the time value of having that inventory tied up.
Break Even Point: The amount of revenue needed to cover all costs with zero profit. Knowing this number helps you set sales targets and understand how close you are to profitability month to month.
Tracking these metrics consistently transforms them from abstract numbers into a dashboard showing exactly how your business performs and where opportunities for improvement exist.
Manual Formula vs. Automated Tools
You can calculate ecommerce profit manually with spreadsheets or use automated tools designed specifically for this purpose. Each approach has benefits and limitations.
Manual Calculation with Spreadsheets
The formula itself is straightforward:
Net Profit = Revenue − (COGS + Shipping Costs + Payment Fees + Platform Fees + Advertising Costs + Other Operating Expenses)
You can build this in Excel or Google Sheets, creating rows for each cost category and a column for each product. Update the numbers regularly, and you'll have a functional profit calculator.
The advantages: It's free. You control exactly what gets tracked and how. You can customize it perfectly for your specific business model. You develop deep familiarity with your numbers through the manual input process.
The disadvantages: It's time consuming. It requires discipline to update regularly. Human error creeps in easily. As your business grows and complexity increases, spreadsheets become unwieldy. They don't integrate with your store data, so you're manually pulling numbers from multiple sources.
Manual spreadsheet calculation works well for new stores with limited products and simple operations. It helps you understand the mechanics of profit calculation in ways that automated tools can obscure. But it doesn't scale efficiently.
Automated Calculator Tools
These range from simple online calculators where you input numbers and get instant results to sophisticated software that integrates with your ecommerce platform and calculates profit automatically for every order.
The advantages: Speed and convenience. Many tools pull data directly from your store, payment processor, and advertising accounts. They update in real time as orders come in. They eliminate calculation errors. They generate reports showing profitability trends over time, by product, by channel, automatically.
The disadvantages: Most robust tools cost money, from $20 to $200+ monthly depending on features and order volume. Free online calculators provide only basic calculations without integration or historical tracking. You're dependent on the tool's methodology and categories, which might not perfectly fit your business. There's a learning curve with any new software.
The best approach for many sellers is starting with manual calculation to understand the components and formulas, then graduating to automated tools as the business grows and time becomes more valuable than the software cost.
Regardless of which method you choose, what matters is that you're calculating profit regularly and using that information to make better business decisions. An imperfect system you actually use beats a perfect system you never implement.
Best Ecommerce Profit Calculator Tools (Free and Paid)
Several tools can help you calculate and track ecommerce profitability with varying levels of sophistication.
IDIGIU.com (Free)
Few websites offer free ecommerce profit calculators where you manually enter costs and revenue to get instant profit calculations. IDIGIU's one works well for quick checks or comparing potential products before sourcing them.
Spreadsheet Templates (Free to Low Cost)
Google Sheets and Excel templates designed specifically for ecommerce profit tracking offer more functionality than simple calculators. Many are available free from ecommerce educators and blogs, or you can purchase sophisticated templates for $10 to $50 that include inventory tracking, cash flow projections, and dashboard visualizations.
The advantage is customization and no ongoing costs. The limitation is manual data entry and no integration with your actual store.
A popular Shopify app specifically designed for profit tracking and analytics. It automatically pulls order data, costs, and advertising spend to calculate real time profit for your entire store and individual products.
Pricing starts around $25 per month. It integrates with advertising platforms to include ad costs in profitability calculations and generates detailed reports showing which products, channels, and campaigns actually drive profit.
Similar to BeProfit, this tool focuses on profit analytics for Shopify stores. It tracks cost of goods, shipping, payment fees, marketing expenses, and other costs to calculate accurate profit margins.
It offers a free plan for stores with limited orders and paid plans starting around $20 monthly for higher volume stores. The interface emphasizes visual dashboards that make profit trends easy to understand at a glance.
This app goes beyond simple profit calculation to focus on customer lifetime value and cohort analysis. It shows not just whether individual orders are profitable but whether your customer acquisition investments pay off over time.
Pricing starts around $20 per month. It's particularly valuable for stores focused on building repeat customer bases rather than one time transactions.
While not ecommerce specific, QuickBooks integrates with major ecommerce platforms and provides comprehensive financial tracking including profitability. It's more robust than specialized profit calculators, handling full accounting, but also more complex and expensive.
Plans start around $30 monthly. If you need full business accounting anyway, QuickBooks can serve double duty for profit tracking and financial management.
An advanced ecommerce analytics platform that includes profit tracking alongside customer behavior, inventory analysis, and marketing attribution. It's designed for more established stores that need sophisticated insights.
Pricing starts around $79 per month, making it too expensive for new stores but valuable for businesses doing significant volume that need deep analytics.
The right tool depends on your store size, budget, and analytical needs. New stores often do fine with free calculators and spreadsheets. Once you're doing steady volume and time becomes scarce, investing in automated tools makes sense. As you scale further, comprehensive platforms that connect profitability to customer behavior and inventory become worth their higher costs.
Tips to Improve Your Ecommerce Profit Margins
Calculating profit is the first step. Improving it is what actually changes your business. Here are practical strategies that increase the money you keep from every sale.
Negotiate Better COGS
Your product cost is often your largest expense, making it your biggest opportunity for margin improvement. Once you have sales history proving consistent volume, approach suppliers about bulk discounts. Suppliers would rather give you 10% to 15% off to secure a large, reliable order than lose you to a competitor.
Consider ordering larger quantities if you have proven demand and storage capacity. The per unit cost often drops significantly at higher order quantities. Just be certain the demand exists. Inventory sitting unsold doesn't save money.
Look for alternative suppliers. The first supplier you found probably isn't your only option. Regularly research alternatives, especially once you understand quality requirements and have sales data to share with potential new suppliers showing you're a serious buyer.
Optimize Shipping Costs
Shipping eats profit faster than almost any other cost, but it's also highly optimizable.
Negotiate carrier rates once you have volume. Both USPS and private carriers offer volume discounts. If you're shipping 100+ packages monthly, you should be paying less than retail rates.
Right size your packaging. Using boxes too large for products costs extra in dimensional weight charges and wastes money on packaging materials. Standardize package sizes to the smallest practical dimensions for your products.
Offer flat rate or free shipping thresholds to increase average order value while controlling shipping costs. Customers ordering $75 instead of $50 to qualify for free shipping often improves net profit even though you're covering shipping, because many costs are per order rather than per dollar sold.
Consider zone based shipping rates if you can. Shipping across the country costs significantly more than regional shipping. Reflecting this in your pricing or targeting ads regionally can preserve margins.
Reduce Transaction Fees
Switching to your platform's native payment processor (like Shopify Payments) often reduces transaction fees compared to third party processors. The difference might only be 0.5% per transaction, but on $100,000 in annual sales, that's $500 in pure profit.
Encourage payment methods with lower fees when possible. ACH transfers and bank payments cost far less than credit cards, though customer convenience matters too.
Increase Average Order Value
Getting customers to spend more per transaction is one of the most effective profit boosters because many costs (payment processing, shipping, advertising) are per order, not per dollar.
Bundle complementary products at a small discount. Customers feel they're getting value, and you're increasing the sale size. A customer buying one item for $30 might happily buy three items together for $75, dramatically improving your profit per order.
Offer quantity discounts that are profitable for you. "Buy two, get 15% off" works when your margin supports it and the increased volume drives more profit than single item sales.
Implement upsells and cross sells at checkout. "Frequently bought together" recommendations or premium versions of selected products can add dollars to orders with minimal friction.
Set minimum order thresholds for free shipping. This directly incentivizes larger orders while letting you control shipping costs.
Optimize Advertising Spend
Advertising can be your biggest profit killer or your growth engine depending on how efficiently you deploy it.
Focus on campaigns and ad sets with proven return. Stop or reduce spend on underperformers ruthlessly. Many sellers keep unprofitable ads running because they generated sales, forgetting that sales at a loss aren't the goal.
Improve your organic reach through SEO, content marketing, and social media presence to reduce dependence on paid advertising. Every organic sale has dramatically better margins than paid acquisitions.
Develop email marketing to existing customers. Remarketing to people who already bought from you costs dramatically less than acquiring new customers. High quality email marketing often produces 10x to 30x return on investment.
Test higher value, lower volume strategies instead of chasing scale. Sometimes targeting a smaller audience willing to pay premium prices produces better profits than mass market approaches with thin margins.
Reduce Return Rates
Returns destroy profit. You lose the payment processing fee, typically pay shipping both directions, and invest time handling the return. The product might be unsellable afterward.
Improve product descriptions and photos to set accurate expectations. Many returns happen because customers received something different from what they expected. Better information reduces disappointment.
Include sizing guides and measurements. Apparel returns often stem from fit issues that could be prevented with clear guidance.
Offer responsive customer service that solves problems without requiring returns when possible.
Cut Unnecessary Subscriptions and Tools
Ecommerce sellers often accumulate software subscriptions that add little value. Audit what you're paying for monthly. That app you signed up for six months ago and forgot about is still charging you. Cancel anything you're not actively using and getting value from.
Raise Prices Strategically
Many sellers underprice out of fear that customers won't buy. But if you're providing genuine value, selling quality products, and offering good service, modest price increases often have minimal impact on conversion while significantly improving margins.
Test price increases on small portions of traffic. A 5% to 10% price increase that reduces conversions by only 2% to 3% dramatically improves profit. You're making more money on fewer orders, often with the same amount of work.
Improving profit margins isn't about finding one magic solution. It's about making small improvements across multiple areas that compound into significantly better unit economics. A business that increases prices 5%, reduces COGS 10%, optimizes shipping to save 15%, and improves advertising efficiency by 20% might double their profit margin through these combined changes.
Final Thoughts
Here's what matters: you need to know whether your ecommerce business actually makes money. Not in a vague sense, not based on revenue charts that feel good, but in the specific, uncomfortable, honest sense of dollars left over after every cost is accounted for.
An ecommerce profit calculator isn't optional if you want to succeed long term. It's the tool that shows you reality, and reality is what you need to make good decisions. Whether you use a simple spreadsheet or sophisticated software matters less than the commitment to regularly, honestly calculate where you actually stand.
Many ecommerce sellers work incredibly hard while barely breaking even or losing money because they never did this math. They're not lazy or stupid. They just focused on the wrong numbers, tracking revenue and orders while profit quietly disappeared.
Don't let that be you. Take an hour this week to gather your real costs and calculate your actual profit. The number might surprise you, possibly in disappointing ways initially. But knowing is always better than guessing, and you can only improve what you measure.
Your ecommerce business deserves to be profitable. You deserve to be paid for your work, time, and risk. Making that happen starts with knowing your numbers and using that knowledge to build better unit economics.
Calculate your profit. Improve your margins. Build a business that doesn't just look successful but actually is.
FAQs
What is a good profit margin for ecommerce?
Profit margins vary significantly by business model, product category, and whether you're measuring gross or net profit.
For gross profit margin (revenue minus COGS), healthy ecommerce businesses typically see 40% to 80%. Products with very low gross margins leave little room to cover operating expenses, while very high gross margins might indicate pricing or positioning opportunities.
For net profit margin (actual take home profit after all expenses), 10% to 20% is considered good for most ecommerce businesses. Some categories like fashion and beauty with strong branding can achieve higher margins. Others like electronics with intense price competition may see lower margins but make up for it in volume.
New businesses often operate at lower margins or even losses initially while building audience and optimizing operations. The key is having a clear path to healthy margins as you scale.
If your net profit margin is below 5%, your business is fragile. Small increases in costs or decreases in conversion can push you into losing money. Focus on margin improvement before scaling.
Can I use Excel to calculate ecommerce profit?
Absolutely. Excel or Google Sheets work perfectly well for calculating ecommerce profit, especially for newer or smaller stores.
Create columns for revenue, COGS, shipping costs, payment processing fees, advertising costs, platform fees, and other expenses. Add a formula that subtracts all costs from revenue to show profit. Create rows for each product or time period you want to analyze.
The advantage of spreadsheets is complete control and customization for your specific situation. The disadvantage is manual data entry and the time required to keep it updated.
Many ecommerce educators offer free spreadsheet templates designed specifically for profit calculation that you can download and customize. These provide a solid starting structure if building from scratch feels overwhelming.
For stores processing dozens or hundreds of orders monthly, the manual work involved in spreadsheet tracking eventually becomes impractical, making automated tools more appealing. But for many sellers, especially those starting out, Excel provides everything needed at zero cost.
Are there free ecommerce profit calculator tools?
Yes, several free options exist depending on your needs.
Simple online calculators from Shopify, various ecommerce blogs, and business tool websites let you input costs and revenue to get instant profit calculations. These work well for quick checks or evaluating products before sourcing them. Search "ecommerce profit calculator" to find multiple free options.
Free spreadsheet templates provide more functionality, letting you track multiple products and time periods without ongoing costs. You can find these by searching for "ecommerce profit tracking spreadsheet template."
Some profit tracking apps offer limited free plans for stores with low order volume. TrueProfit and similar tools often have free tiers supporting up to 100 orders per month, which works for very new stores.
The limitation of free tools is typically lack of automation and integration. You'll be manually entering data rather than having it pulled automatically from your store. For many sellers, especially early on, that trade off makes sense.
As your business grows and your time becomes more valuable, investing in paid tools that automate tracking often becomes worthwhile. But free options provide perfectly functional profit calculation when you're starting out or need occasional calculations.
How do I calculate profit after ads and shipping?
Start with your revenue for the order, then subtract each cost:
Revenue (what the customer paid) minus COGS (what you paid for the product) minus Shipping Cost (what the carrier charged you, not what the customer paid you) minus Payment Processing Fee (typically 2.9% + $0.30) minus Platform Fee (your ecommerce platform's transaction fee if applicable) minus Advertising Cost (if this sale came from paid ads) equals Net Profit for this order
For advertising costs, divide your total ad spend by the number of orders generated by those ads to get an average cost per acquisition. Not all sales involve ad costs. Organic sales, repeat customers buying through email marketing, or word of mouth referrals typically don't carry acquisition costs.
Be honest about attribution. If you're running ads and also getting organic sales, don't assign ad costs to every sale. Look at your analytics to understand what portion of sales actually came from paid advertising.
The detailed calculation might look like this for a $60 order:
Revenue: $60 COGS: $18 Shipping: $8 Payment Processing: $2.04 Platform Fee: $0.60 Ad Cost: $15 Net Profit: $16.36
That's roughly 27% net margin after accounting for ads and shipping. Without the ad cost, the margin would have been closer to 52%, showing how significantly customer acquisition costs affect profitability.
What's the difference between gross and net profit in ecommerce?
Gross profit and net profit measure profitability at different stages, and understanding both matters for running a healthy business.
Gross profit is revenue minus cost of goods sold (COGS). It shows how much money you have left after paying for the products themselves but before accounting for any operating expenses. Gross profit tells you if your basic product economics work, if you're buying products at prices that allow for sustainable markup.
The formula is: Gross Profit = Revenue minus COGS
If you sold a product for $100 and it cost you $40, your gross profit is $60, or 60% gross margin.
Net profit is what remains after ALL expenses are paid. COGS, shipping, transaction fees, advertising, software subscriptions, salaries, rent, taxes, everything. Net profit is your actual take home, the money you can reinvest in the business or pay yourself.
The formula is: Net Profit = Revenue minus All Expenses
Using the same $100 product: after COGS ($40), shipping ($12), payment processing ($3), platform fees ($2), advertising ($20), and allocated operating expenses ($8), your net profit might be $15, or 15% net margin.
Both metrics matter. Gross profit needs to be high enough to cover all your operating expenses and still leave room for net profit. If your gross margins are too thin, you'll struggle to achieve positive net profit no matter how efficiently you operate.
Many ecommerce sellers make the mistake of looking only at gross profit and feeling good about their margins, not realizing that by the time all other costs are included, net profit is minimal or negative. Always calculate both to understand the full picture.