How this calculator works
Contribution per order is what each sale leaves to pay for advertising and fixed costs. It is the number that decides how much you can spend to win an order.
Shopify costs people forget
- Payment processing. Shopify Payments charges a percentage plus a fixed fee per online transaction, and the rate depends on your plan and country. If you use a third-party gateway, Shopify adds its own transaction fee on top. Check your current rates in your admin before relying on the default.
- Apps. Reviews, subscriptions, upsells and email apps add up quickly; many stores spend more on apps than on the Shopify plan itself.
- Shipping you absorb. "Free shipping" is never free - it is a cost per order.
- Returns and refunds. Add your average refund cost per order to product cost, especially in apparel.
- Currency conversion and payout fees if you sell internationally.
- Taxes. Sales tax and VAT you collect are not revenue; leave them out of order value.
Worked example
With the defaults - a $60 order, $20 product, $6 shipping, 2.9% + $0.30 payment fees - each order contributes $31.96. At 500 orders a month that is $15,980, minus $5,000 of ads and $200 of plan and apps, leaving $10,780 profit, a 35.9% net margin. Break-even ROAS is 1.88x: spend $5,000 on ads and they must drive at least $9,400 of sales to pay for themselves.
Ways to raise profit per order
- Raise average order value with bundles and a free-shipping threshold set above your current average order.
- Negotiate shipping rates or switch carriers once volume grows.
- Cut apps you no longer use - review them every quarter.
- Raise prices on best-sellers; a small price increase goes straight to profit.
Next: check whether your campaigns clear the bar with the ROAS calculator, and see how break-even ROAS works.
Frequently asked questions
What profit margin is good for a Shopify store?
It varies by product. Many stores aim for 50%+ gross margin so there is room for ads, and a net margin of 10 to 20% after ads and fixed costs is a healthy result for most small e-commerce brands.
Does Shopify charge transaction fees?
With Shopify Payments you pay card processing fees but no extra Shopify transaction fee. With third-party payment gateways, Shopify adds a transaction fee that depends on your plan.
Should I include my own time as a cost?
Not in this calculator, but remember that profit has to pay you. If the business needs 40 hours a week, compare monthly profit with what that time is worth.