The deductions in order of who takes them
Money leaves an online order in a fixed sequence and it helps to picture it that way. The buyer pays, the marketplace takes its commission off the top, the processor takes a percentage plus a fixed amount per transaction, and what settles into your account is already smaller than the order total. Then your own costs come out: the item, the label, the box, and the advertising that produced the order in the first place. What is left is the profit on one order that stays sold.
The fixed part of the processing fee is the one that quietly changes the shape of a catalogue. A flat charge per transaction is trivial on a $90 order and material on a $9 one, which is why small-basket stores end up pushing bundles and minimum orders. If your average order value is low, look at what that line is doing as a percentage before you look at anything else.
Free shipping is a discount with extra steps
Choosing free shipping does not remove the label cost, it moves it onto your side of the ledger and usually lifts conversion enough to be worth it. What it also does is enlarge the commission base if you have priced the shipping into the item, since a percentage commission on a shipping-inclusive price takes a cut of the postage too. Running both modes on this page shows the difference on a real basket rather than in the abstract.
When the buyer pays shipping separately, the calculation here charges them and bills you the same figure. In practice they rarely match — you charge a flat rate and pay a zoned one — so if your shipping charge is a profit centre or a loss leader, adjust the item price to absorb the difference and note that you have done it.
Why a return costs more than the sale earned
A returned order does not simply cancel out. The advertising that bought the click is gone, the packaging is gone, the outbound label is gone, and you are often paying the return postage as well. The item may come back sellable at full price, or it may come back opened, and the honest figure for the return cost box includes some allowance for the ones that cannot go back on the shelf as new.
That asymmetry is why a modest return rate does so much damage on a thin margin. If a kept order makes $6 and a returned one costs $10, then a return rate of one in five wipes out the profit from the other four. The per-100-orders line on this page is there to make that visible, because a percentage on its own does not feel like anything.
Advertising, and the ROAS trap
ROAS measures revenue against ad spend, which means it can look excellent on a product that loses money. A 400 percent ROAS on a 20 percent margin item is spending $1 to make $4 of sales that carry $0.80 of contribution, and that is a loss on every order. The number that decides whether advertising works is the profit per order after the ad cost, which is what this page computes. If you would rather work in ROAS, the break-even one is roughly your revenue divided by your contribution — anything below that is buying sales with your own money.
None of the figures on this page are forecasts. They are your assumptions with the arithmetic done consistently, and the answer moves the moment any assumption does. Fee rates, ad costs and return rates all drift, so it is worth reopening this with real payout statements every quarter rather than trusting a model you built when you launched. When you have the per-order profit you trust, the break-even calculator is where it meets the rent.
Questions people ask
What fee percentage should I put in?
The one on your own payout statement, worked out from actual numbers: take the total fees deducted over a month and divide by the total order value for that month. Published rate cards are a starting point at best, because commission varies by category, by fulfilment method, by seller tier and by promotions you may or may not have opted into, and there are often small line items that never appear in the headline number. Doing it from real payouts also catches the fees you forgot you were paying.
Should advertising really come off every order?
It depends how much of your volume it buys. If half your orders arrive from search and repeat customers, then spreading total ad spend across all orders understates the profit on the free half and overstates it on the paid half. Two runs, one with ads and one without, bracket the truth better than one blended figure. What you should not do is leave advertising out entirely because it is a marketing budget rather than a cost of goods — it is money that left, and if it is not in the per-order number it will not be anywhere.
What return rate should I assume?
Your own, from your own data, over at least a few months. Rates vary enormously between categories — anything fitted or sized returns far more than a consumable — and between price points within the same category. If you are launching something new and genuinely have no history, run the page at several rates and see how far the profit moves; if the answer changes from healthy to negative between three and eight percent, you have learned that the return rate is the thing to watch, which is worth knowing before the first orders land.
Why is sales tax left out?
Because it is not yours. Tax collected from a buyer sits with you briefly and then goes to a state, so counting it as revenue inflates every ratio on the page. In most marketplace arrangements it is collected and remitted for you and never touches your figures at all. Keep the item price, the cost and every fee on a pre-tax basis and the profit per order means what it says. Tax you pay on your own inputs is a different question and belongs in the landed cost of the item.