Revenue alone does not show whether an online store is profitable. Start with selling price and subtract the variable costs required to create and fulfill an order.
Order-level calculation
Order profit ≈ selling price − product cost − fulfillment − fees − advertising cost/order
A $50 order with $18 product cost, $6 fulfillment, $2 fees and $8 advertising leaves about $16 before fixed overhead and taxes.
Advertising needs margin context
CPA shows advertising cost per acquisition. ROAS shows attributed revenue per advertising dollar. Neither equals profit.
Costs sellers often miss
- Returns and refunds.
- Payment and marketplace fees.
- Packaging and fulfillment.
- Discounts.
- Non-converting ad spend.
- Fixed expenses.
Useful calculators
Important: Use current bills, tariffs, quotes and contracts for important decisions.