A candle brand sells a candle for $34. Cost of goods is $9.50, payment fees are $1.20, and pick-and-pack plus shipping is $6. That leaves $17.30 of profit: a 50.9% net margin and a 2.4x markup on cost.
Free profit margin calculator 2026
Free profit margin calculator for Shopify merchants. Compute product margins, markup percentage, profit per unit, and break-even price in seconds.
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Example and tips
- Track margin, not markup. A 100% markup is only a 50% margin, and the two get confused constantly.
- Fold in every variable cost (fees, shipping, packaging, returns) or you will overstate your margin by 8 to 12 points.
- Below a 50% net margin, paid acquisition gets hard. Aim for 60% or more on your DTC hero products.
Kanal
What is Kanal?
Kanal turns WhatsApp into a sales channel for Shopify stores: abandoned cart recovery, order updates, campaigns to your segments, an AI chatbot and a shared inbox, with revenue tracked per message.
+90%open rate5/5on the Shopify App StoreFrom €89per month
See WhatsApp for Shopify in detailAbandoned cart flowFincut · WhatsAppLive
- Checkout abandonedTech T-shirt · Black, M
- Wait 1 hourSmart delay, quiet hours respected
- WhatsApp reminderProduct photo · 2 buttons
- Customer replyAnswered by the AI agent
- Order recovered#1042 · Paid in Shopify
Recovered this month€12,445.20
Your Shopify store on WhatsApp in 15 minutes
Leave your email and store address: a Kanal expert shows you the WhatsApp flows that pay for your catalog, cart recovery, order updates and campaigns.
How it works
Free profit margin calculator for Shopify merchants. Compute product margins, markup percentage, profit per unit, and break-even price in seconds.
- 1
Enter your product cost
Type in what each unit costs you to source or manufacture, including raw materials and supplier fees.
- 2
Add your selling price
Input the price your Shopify store charges customers, before any discount codes or shipping.
- 3
Include shipping cost
Add the per-unit shipping cost you absorb so the margin reflects your true landed cost.
- 4
Set monthly sales volume
Enter how many units you sell per month to see your projected monthly profit at the current price point.
- 5
Adjust to optimize pricing
Tweak any field to find the optimal selling price that protects your margin and keeps you competitive on Shopify.
Frequently asked questions
What is profit margin and why does it matter for Shopify stores?
Profit margin is the percentage of revenue you keep as profit after covering product cost and shipping. It is the single most important pricing metric for Shopify merchants because it determines how much you can reinvest in ads, WhatsApp marketing, and inventory.
How is profit margin calculated?
Profit Margin = ((Selling Price - Total Cost) / Selling Price) x 100. Total cost includes product cost plus shipping. The formula gives you the percentage of every dollar of revenue that becomes profit.
What is a good profit margin for e-commerce in 2026?
There is no single good margin: it depends on your category, your prices and your costs. What matters is that the margin left after product and shipping costs pays for your advertising, your fixed costs and the profit you expect. Compare your margin with your own history and with what each sale has to pay for, not with an industry average.
How do profit margins impact Shopify revenue and growth?
A higher margin lets you bid more aggressively on Meta ads, run discounts in WhatsApp campaigns, and reinvest in retention. The margin on each order also sets the most you can pay to acquire a customer: an acquisition cost above the profit a customer brings in loses money.
What are the most common pricing mistakes Shopify merchants make?
The top three are forgetting shipping in the cost base, copying competitor prices without checking unit economics, and discounting too deep on first orders. Always price for your second sale, not the first, so you can fund retention through WhatsApp and email.
How can Kanal and WhatsApp help protect my profit margin?
Orders from existing customers and recovered carts do not need a new paid click, which protects the margin on those sales. Kanal is a WhatsApp marketing app for Shopify: it sends abandoned cart reminders, campaigns and post-purchase messages on WhatsApp. See how it works on /demo.