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Calculating True Profit After Marketplace Fees and Returns

Many ecommerce sellers celebrate revenue without realizing that profit is a far more important (and often misunderstood) metric. Between marketplace fees, shipping costs, advertising spend, and returns, what’s left over can be surprisingly slim.

This guide walks through how to calculate true profit across marketplaces like Amazon, Walmart, and eBay—ensuring you grow sustainably with clear financial insight.

Why Revenue ≠ Profit

Your top-line sales number doesn’t reflect the costs of running your store. Every order must account for:

  • Cost of Goods Sold (COGS)
  • Marketplace fees
  • Shipping & fulfillment costs
  • Advertising spend
  • Refunds and return costs

Without tracking these, you risk:

✅ Overspending on ad campaigns
✅ Pricing SKUs too low to profit
✅ Misjudging your store’s actual performance

Step-by-Step: Calculating True Profit Per Order

1. Start With Gross Sales

This is the order’s total sale value (e.g., $45.00 for a necklace sold on Amazon).

2. Subtract Cost of Goods Sold (COGS)

What you paid your supplier for the item.

Example:

  • Gross Sale: $45.00
  • COGS: $15.00
  • Running total: $30.00

3. Subtract Marketplace Fees

Each platform charges fees:

  • Amazon: Referral fees (usually 8–20%) + closing fees
  • Walmart: Referral fees (8–15%)
  • eBay: Final value fees + PayPal fees (if applicable)

Example (Amazon):

  • Referral fee (15% of $45): $6.75
  • Net: $23.25

4. Subtract Shipping Costs

Include postage, packaging, and handling.

Example:

  • Shipping: $5.00
  • Net: $18.25

5. Subtract Return-Related Costs

Estimate based on return rate per product or category. This includes:

  • Refunds
  • Lost shipping fees
  • Return shipping (if covered)
  • Restocking losses (e.g., damaged or unsellable items)

Example:

  • Assume 10% return rate, $4 loss per return → $0.40 per order
  • Net: $17.85

Optional: Subtract Advertising Costs

If you run ads to drive traffic (e.g., Amazon Sponsored Products, Walmart Performance Ads, or Google Shopping), factor this into profit per order.

Example:

  • Ad spend to acquire sale: $3.00
  • Final profit: $14.85

Profit Formula Summary

markdownCopyEditTrue Profit = Sale Price
            - COGS
            - Marketplace Fees
            - Shipping
            - (Avg Return Cost per Order)
            - (Ad Spend per Order)

Automating This with EcomBiz.AI

EcomBiz.AI calculates true profit in real time using:

  • Live cost and fee data from each marketplace
  • Return trends by SKU
  • Ad spend integrations (Amazon, Meta, Google)
  • Supplier invoices and shipping costs

You get automated reporting at the order, SKU, channel, and store level—with no spreadsheets required.

Final Thoughts

If you’re not calculating true profit, you’re flying blind. Marketplace fees and returns can quietly eat into your margins—even when revenue looks great.

Use platforms like EcomBiz.AI to surface accurate profit data, scale intelligently, and make decisions rooted in numbers—not assumptions.

👉 Join the Waitlist to automate your profit tracking today.

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