SSkuMath

Shopify Profit Margin Calculator

What does one order actually earn after apps, payment fees and ads?

Your numbers

Result

Net profit per order
—

    How this is calculated

    On your own store the platform fee is only the beginning. This calculator works out contribution margin per order by subtracting cost of goods, shipping, payment processing, app costs and the advertising needed to win the order in the first place.

    1. Payment processing = order value × processing rate + fixed fee
    2. Total variable cost = COGS + shipping + payment processing + apps + CPA
    3. Contribution margin per order = order value − total variable cost
    4. Maximum viable CPA = order value − (COGS + shipping + processing + apps)
    5. Monthly contribution = contribution per order × orders per month

    What to make of the number

    The single number that decides whether a Shopify store can scale is the maximum viable CPA. Once you know it, every campaign has a hard ceiling and you stop discovering unprofitable growth a month after the spend. Stores with a CPA ceiling under about $15 on a $60 order usually cannot buy traffic profitably at all.

    Frequently asked questions

    What is the difference between gross margin and contribution margin?
    Gross margin only subtracts the cost of goods. Contribution margin subtracts every cost that scales with the order — shipping, payment fees, apps and the advertising that won the order. Contribution margin is the figure that tells you whether growth is profitable.
    Why use CPA rather than ROAS?
    ROAS hides the margin. A 3x ROAS is profitable at 70% gross margin and a disaster at 30%. CPA compared against your maximum viable CPA is unambiguous, and it is the number your ad platform can actually optimise toward.
    How do I work out my app cost per order?
    Add up every monthly subscription connected to the store — apps, platform plan, email tool, reviews tool — and divide by orders per month. Most stores underestimate this by ignoring apps they no longer use.
    Should fixed costs be included?
    Not in contribution margin. Rent, salaries and retainers do not change with the next order, so including them makes an otherwise healthy order look unprofitable. Compare total monthly contribution against fixed costs separately.
    What is a healthy contribution margin?
    Above 30% leaves room to scale ad spend. Between 15% and 30% the store works but growth will be slow, because every new order leaves little to reinvest. Below 15% you are effectively buying revenue, not profit.

    Related calculators

    Customer Acquisition Cost Calculator
    What does it cost me to win one customer?
    Target CPA Calculator
    What is the most I can pay for a customer?
    Average Order Value Calculator
    What is each order worth, and what would raising it be worth?
    Product Pricing Calculator
    What price do I need to hit my target margin?