Ecommerce Margin Calculator
Gross margin tells you what you make over product cost. This shows that, your markup, and what you actually keep per order once GST, shipping, packaging, marketplace commission and payment fees come out — plus the price you'd need for a target margin.
52.7%
contribution margin · ₹501.45 profit per order
Gross margin
63.2%
Price minus product cost only
Markup
171.8%
Gross profit ÷ product cost
GST in the price
₹47.57
Collected for the government — not yours
| Price excluding GST | ₹951.43 |
| − Product cost | ₹350.00 |
| − Shipping & packaging | ₹80.00 |
| − Other per-order costs | ₹0.00 |
| − Marketplace commission | ₹0.00 |
| − Payment gateway fee | ₹19.98 |
| = Contribution profit per order | ₹501.45 |
₹664.95
selling price incl. GST, same costs as above
This is the margin on one order that gets delivered and kept. Real stores also lose money on cancelled orders, RTO (orders refused at the door) and customer returns, and spend on ads to get each order. For your margin across a whole month of orders, including all of that, use the D2C Profit Calculator.
A ₹1,299 shirt sold on Amazon: a 60% gross margin looks healthy, but after the 21% referral fee, ₹58 closing fee, shipping and GST, the real margin on each order is much thinner.
Inputs
- Selling price (incl. 5% GST)
- ₹1,299
- Product cost
- ₹480
- Shipping + packaging
- ₹85
- Amazon referral fee
- 21%
- Closing fee
- ₹58
Result
- Gross margin
- 61.2%
- Markup
- 157.7%
- Contribution profit per order
- ₹354.34
- Contribution margin
- 28.6%
- Price for a 30% margin
- ₹1,335.00
What's the difference between margin and markup?
Both compare your profit with something else. Margin divides profit by the selling price; markup divides it by your cost. A product that costs ₹400 and sells for ₹1,000 (excluding GST) has a 60% margin but a 150% markup — so a '50% markup' is only a 33% margin.
What's the difference between gross margin and contribution margin?
Gross margin only subtracts product cost. Contribution margin also subtracts every cost that comes with each order — shipping, packaging, commission, payment fees. Contribution margin is the one that tells you whether an order actually makes money.
Should I calculate margin on the price with or without GST?
Without. The GST in your price is collected for the government, not earned by you, so we remove it first. Calculating margin on the GST-inclusive price overstates it.
How do I calculate profit margin?
Profit margin = (selling price excluding GST − costs) ÷ selling price excluding GST. Use only product cost for gross margin, or all per-order costs for contribution margin.
Why is my real profit lower than this calculator shows?
This is the margin on one order that's delivered and kept. Across a month you also lose money on cancellations, RTO and returns, and pay for ads. The D2C Profit Calculator models all of that.
The contribution margin formula, step by step: build the order funnel, find net revenue, subtract every cost line, and split it into CM1, CM2 and CM3.
Gross margin vs contribution margin for ecommerce, with a worked Amazon example of how fees and RTO shrink a healthy margin, plus margin vs markup.
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