Pricing a product is the difference between a store that scales and one that quietly loses money on every sale. The math is simple, but it is easy to forget a cost (payment fees, shipping, the ad spend it took to win the order) and end up with a margin that looks healthy and isn't. The calculator above accounts for all of it, so the profit number you see is the profit you actually keep. Enter your costs and price to see where you stand in seconds.
Once you know your own unit economics, the next question is what your competitors charge and how they fulfil it. We pull real product prices and the apps powering any Shopify store with Koala Inspector. To estimate a store's total revenue from traffic and conversion, use our Shopify revenue calculator.
How to calculate profit margin on Shopify
Profit per order is what's left after every cost comes out of the selling price:
Profit = selling price - product cost - shipping - payment fees - ad spend
Profit margin then expresses that profit as a share of the price:
Profit margin = profit / selling price x 100
Say you sell a product for $50. It costs you $18, shipping is $5, payment processing takes 2.9% ($1.45), and you spent $8 on ads to win the sale. Your costs total $32.45, leaving $17.55 in profit and a 35% margin. Drop the ad spend and the same order returns a 51% margin, which is why traffic source matters as much as price.
Margin vs. markup: they are not the same
These two get mixed up constantly, and the gap between them grows as prices rise.
- Margin is profit divided by the selling price.
- Markup is profit divided by your cost.
A product that costs $20 and sells for $40 carries a 50% margin and a 100% markup. If you set prices by "doubling my cost," you are working in markup, not margin, and your true take-home is lower than the headline number suggests. The calculator shows both at once so you can price in whichever language your suppliers and spreadsheets use.
Break-even: the price you cannot go below
Break-even is the lowest price at which an order makes zero profit. Because payment fees scale with the price, the calculator solves for it directly rather than just adding costs up. Knowing your break-even price tells you how much room you have to discount before a sale starts costing you money, which is exactly the number you want during a flash sale or a competitor price war.
Dropshipping mode: model your ad spend
For dropshippers, the largest cost is rarely the product. It's the ad spend it takes to acquire a customer. Switch the calculator to dropshipping mode and it asks for your ad cost per acquisition (CPA), then reports a break-even ROAS: the return on ad spend at which the order breaks even. If your break-even ROAS is 2.5x, your campaigns have to return at least $2.50 for every $1 spent just to stay even. Anything under that, and you are paying to lose money, no matter how good the product looks.
See what your competitors are doing
Modeling your own margins is half the picture. The other half is knowing what similar stores charge, how they ship, and which apps they run. Koala Inspector is a free Chrome extension that surfaces a store's product prices, estimated traffic, and the apps it uses, all from what any visitor's browser can already see. Open a competitor's store, click the icon, and benchmark your pricing against the market instead of guessing.