Note: I used an AI assistant (Claude) to help write this article. The numbers are an invented example and I ran the arithmetic. The fee rates below are examples, not current official fees. Fees differ by country and change often, so check your own. This is not tax advice.
Shop dashboards show revenue and fees, but few sellers see profit per order after product cost, shipping you pay, fees and refunds. Here is the calculation, step by step.
Invented example, one order of a small item:
- Item price 11.00, shipping charged to the buyer 3.00, so the order total is 14.00
- Cost of the item (materials and packaging) 3.50
- Shipping you pay to the carrier 4.20
- Example fees: transaction 6.5% of the total, payment processing 3% of the total plus 0.25, listing 0.20
Fees: 0.065 x 14.00 = 0.91; 0.03 x 14.00 + 0.25 = 0.67; listing 0.20. Total fees 1.78.
Profit = 14.00 - 3.50 - 4.20 - 1.78 = 4.52.
Now the cases that quietly eat profit:
- Offsite ads fee. If the platform charges 15% of the total on an order that came from its ads, that is 2.10 more. Profit on that order falls to 2.42.
- Refund. If you refund the order and still paid shipping, you lose the 4.20 and possibly part of the fees, depending on the platform. If the item is not returned, you also lose its cost (3.50). That one refund cancels almost all of the profit (4.52) of a normal order.
So averages hide the picture. Compute profit per order and then group it by product. Sellers often find one or two products that sell often and earn almost nothing.
Reverse price: what item price gives a 35% margin on the order total?
The example order above has a margin of 4.52 / 14.00 = 32.3%. To reach 35% on a normal order (no ads, no refund), with the same 3.00 shipping charged to the buyer:
fixed per order = listing + processing fixed + item cost + shipping paid = 0.20 + 0.25 + 3.50 + 4.20 = 8.15
percentage fees = 6.5% + 3% = 9.5%
order total = fixed / (1 - percentage fees - target margin) = 8.15 / (1 - 0.095 - 0.35) = 14.68
item price = order total - shipping charged = 14.68 - 3.00 = 11.68
Check: 14.68 x 0.905 - 8.15 = 5.14, and 5.14 / 14.68 = 35%. So this item would need to list at about 11.68 instead of 11.00 to reach a 35% margin on a normal order.
Practical steps:
- Export your orders as CSV from your shop dashboard.
- Add columns for item cost and shipping paid.
- Compute fees with your own rates and subtract.
- Group by product, sort by profit per order, and check the bottom three.
I am testing a small tool that does this from an order CSV, with an editable fee table. It is not built yet. There is a sample report on invented orders and a waiting list: https://orderledger.pages.dev
Which cost do you find hardest to track per order?
