E-Commerce Profitability Simulator – Tutorial
On this page, you can find the logic, usage, and important details of the E-Commerce Profitability Simulator calculator.
How to Calculate E-Commerce Profitability
In e-commerce, "selling price" and "profit" are rarely the same thing. To see your real earnings when selling a product, you need to subtract every expense item one by one.
1) Core Calculation Logic
Step-by-step net profit:
- Remove VAT from the selling price → net sales amount
- Subtract platform commission from net sales
- Subtract payment / virtual POS fee from net sales
- Subtract purchase cost, shipping, packaging, advertising, and other expenses
- What remains = Net Profit
1.1 VAT and Net Sales
The price a customer pays is the VAT-inclusive (gross) price. After remitting VAT to the tax authority, the amount that remains for you is the net sales figure.
Net Sales = Gross Sales / (1 + VAT Rate)
Example: €399 gross, 20% VAT → Net = 399 / 1.20 = €332.50
1.2 Platform Commission
Platforms like Amazon and Etsy charge a percentage on each sale. Commission can be calculated on the gross (VAT-inclusive) or net (VAT-exclusive) price — you can choose both in this tool.
Approximate platform rates (reference only, subject to change):
| Platform | Approx. Commission |
|---|---|
| Trendyol | ~15% |
| Hepsiburada | ~12% |
| Amazon | ~15% |
| Etsy | ~6.5% |
2) Break-Even Price
The break-even price is the selling price at which net profit equals zero. Sell below it and you lose money; sell above it and you earn a profit.
The calculator finds this price automatically. If the combined commission and VAT rates are too high (denominator ≤ 0), no break-even price can be found — this signals that profitability is impossible under the current cost structure.
3) Profit Margin
Profit Margin = (Net Profit / Net Sales) × 100
- 20%+: Healthy e-commerce margin
- 10–20%: Acceptable — room for improvement
- 0–10%: Low margin — advertising spend or returns can push you to a loss
- Negative: You lose money on every sale
4) Key Things to Watch
- If your purchase price is VAT-inclusive and you can reclaim that VAT, the tool converts it to a VAT-exclusive cost for you.
- Enter shipping cost as what you pay to the carrier, not what you charge the customer.
- Convert your advertising budget to a per-unit cost (total ad spend ÷ number of units sold) before entering it.
- Platform presets are approximate; always verify current rates in the platform's seller help center.