E-Commerce Profit Calculator

Your e-commerce profit margin is calculated by subtracting all costs from your selling price, then dividing by the selling price and multiplying by 100. Total costs include product cost, platform fees, shipping, packaging, returns, advertising and VAT if applicable. For example, if you sell a product for £25 and your total costs are £18, your profit margin is 28%. A healthy margin for e-commerce is typically 20-40% depending on the product category.

Amazon UK charges a referral fee of 7-15% depending on the product category, with most categories at 15%. Individual sellers pay an additional £0.75 per item, while Professional sellers pay £25/month (excluding VAT). If using FBA (Fulfilment by Amazon), additional fees apply for storage (£0.65-1.60/cubic foot/month) and fulfilment (£2.16-5.58 per unit depending on size and weight). These fees can significantly impact your profit margin.

eBay UK charges a final value fee of 12.8% of the total sale amount (including postage) for most categories, with a minimum of £0.25 per order. Sellers get a number of free listings per month (typically 1,000 for personal accounts), after which there is a £0.35 insertion fee per listing. eBay also charges for promoted listings (typically 2-15% of sale price) and offers optional shop subscriptions from £25/month for reduced fees.

The UK VAT registration threshold is £85,000 in taxable turnover over any rolling 12-month period. Once registered, you must charge 20% VAT on sales and submit quarterly VAT returns. You can reclaim VAT on business purchases. For e-commerce sellers importing goods, note that VAT is due at the point of importation for consignments over £135. Some sellers voluntarily register below the threshold to reclaim input VAT on stock purchases.

Returns directly reduce your profit by the cost of the refund, return shipping, and often the loss of the product if it cannot be resold. The average UK e-commerce return rate is 20-30% for fashion, 5-10% for electronics, and 3-5% for home goods. Include a returns percentage in your profit calculation and factor in return shipping costs. Some sellers build return costs into their pricing, while others offer free returns as a competitive advantage.

A good net profit margin for UK e-commerce varies by product type: 20-40% for private label products, 10-20% for reselling branded goods, and 40-60% for handmade or unique items. After all costs (platform fees, shipping, advertising, returns, VAT), many successful sellers target a minimum net margin of 20%. Margins below 15% are generally considered too thin to sustain a business after accounting for unexpected costs.

Etsy charges a £0.16 listing fee per item (valid for 4 months), a 6.5% transaction fee on the total sale price including shipping, and a 4% + £0.20 payment processing fee through Etsy Payments. If you use Offsite Ads (mandatory for shops earning over $10,000/year), there is an additional 12% fee on sales from Etsy advertising, or 15% for smaller shops who opt in. Total Etsy fees typically amount to 11-13% of your selling price.

Shopify plans for UK sellers start at £25/month for Basic, £65/month for Shopify, and £344/month for Advanced. Payment processing via Shopify Payments costs 2% + £0.25 (Basic), 1.7% + £0.25 (Shopify), or 1.5% + £0.25 (Advanced) per transaction. Using third-party payment gateways adds an additional 2%, 1% or 0.5% fee respectively. Unlike marketplaces, Shopify does not charge commission on sales, making it cheaper at higher volumes.

Break-even analysis determines how many units you need to sell to cover all your costs. Calculate it by dividing your fixed monthly costs (subscriptions, storage, tools) by your profit per unit. For example, if your monthly fixed costs are £500 and you make £5 profit per unit, you need to sell 100 units to break even. Every unit sold beyond that is pure profit. Include all recurring costs such as platform subscriptions, advertising minimums and inventory storage.

TikTok Shop charges a 5% commission on each sale, which is competitive compared to Amazon and eBay. Sellers can list products directly on TikTok, use live shopping features, and partner with creators who earn commission on sales. Payment processing is included in the 5% fee. TikTok Shop is growing rapidly in the UK and works best for visually appealing products that can be demonstrated in short video content, particularly in beauty, fashion and homeware categories.