Selling price minus product cost isn't your margin. Add payment processing, shipping, packaging and the ad cost of getting the order, and see what one sale really leaves you with.
Profit per order
Payment fee defaults are only an example. Rates depend on your plan, country and payment gateway, so check yours in Shopify admin.
Gross margin tells you whether the product is priced sensibly. Net margin per order tells you whether the business makes money once it's sold and shipped.
| Gross margin | Net margin per order | |
|---|---|---|
| Formula | (price − product cost) ÷ price | (price − every cost of that order) ÷ price |
| Costs counted | Product cost only | Product, payment fees, shipping, packaging and ad cost |
| Answers | "Is this priced well for what it costs to make?" | "Do I keep anything from a sale I paid to acquire?" |
| Blind spot | Looks healthy even when shipping and ads erase it | Leaves out fixed costs like software, salaries and rent |
On the example above, the gross margin is over 70%, yet after fees, shipping, packaging and ads each order clears far less. That gap is why the per-order view matters.
Whatever an order leaves after product, fees, shipping and packaging is the most you can spend acquiring it and still break even. Divide the price by that figure to get your break-even ROAS, or skip the arithmetic and use the break-even ROAS calculator.
Margins also move for reasons a spreadsheet won't show. Sizing complaints, late deliveries and a run of bad reviews all push up returns and cut repeat purchases, and they show up in what customers say about your brand before they show up in the numbers. That's what Mentionfront is for.